Annual Report of 2004-05

MSSL Organisation
Founder Chairperson - (Late) Smt Swarn Lata Sehgal
Chairman Emeritus
- (Late) Sh. K.L. Sehgal
Board of Directors
Vivek Chaand Sehgal
Chairman
Toshimi Shirakawa
Director
Ram Ganapati
Director
Mohinder Singh Gujral
Director
Hiroto Murai
Director
Bimal Dhar
Director
1
Akihiko Yamauchi
Whole-Time Director
Maj. Gen. Amarjit Singh (Retd.)
Director
Masahiro Matsushita
Alternate Director
Pankaj K. Mital
Alternate Director
Key Information
Registered Office
Investor Cell
3rd Floor, Bhageria House G.N. Gauba (Company Secretary)
43, Community Centre
E-mail: [email protected]
New Friends Colony
New Delhi – 110 065
Auditors
Price Waterhouse
Chartered Accountants
P-1, Aditya Vihar,Saidulajab
Opposite D-Block, Saket
Mehrauli Badarpur Road
New Delhi – 110 030
Bankers
State Bank of India
ICICI Bank Ltd.
UTI Bank Ltd.
Bank of Tokyo Mitsubishi Ltd.
HDFC Bank Ltd.
Citibank N.A.
CAUTIONARY STATEMENT: “Certain expectations and projections regarding future performance of the company referred to in this Annual Report may be “forward-looking” statements within
the meaning of applicable securities law and regulations. These are statements which the management believes are true at the time of their preparation based on available data and information
and are subject to certain future events and uncertainties, which could cause actual results to differ materially from those anticipated in these forward-looking statements. Factors influencing
forward-looking statements include the operating environment and foreign currency exchange fluctuations.”
T O G E T H E R
W E
M A K E
I T
H A P P E N
looking at mergers and acquisitions, particularly in the
European markets that are in line with our vision and hold
good potential. We have recently acquired two running
business in Germany namely that of Reiner Präzision GmbH
and G+S Kunststofftechnik GmbH.
The running business of Reiner Präzision GmbH for
manufacturing precision machined components has been
acquired and placed under a new JV - Mothersonsumi Reiner
GmbH. This JV specializes in manufacturing of precision
machined components and is serving a niche in auto
component industry.
G+S Kunststofftechnik GmbH is involved in manufacturing
of injection moulded components. With this acquisition we
have also acquired technology for 2K moulding.
The above acquisitions bring with them new
technologies and new customers (Tier 1
suppliers to the European Automotive
Industry). Similar acquisitions in the future
are going to fuel inorganic growth of MSSL.
While there is a possibility that we might miss
the desired average in a particular year or
even exceed the same in another year, we
will remain focused on our Balance Sheet
and on our return on capital at all times.
MBK, KTM and Yamaha. In addition to this we are also
focusing on tier 1 & 2 suppliers as well as non-automotive
industries. A significant contribution to exports comes from
supplies to material handling and earthmoving equipment
segments, where we are supplying to market leaders including
JC Bamford, NACCO Material Handling Group and Mitsubishi
Caterpillar Forklift Europe. We are also exporting to Japan,
USA and Asian countries. Starting with export of rubber
components, we now export Wiring Harnesses, Plastic
Components and Assemblies, Rear Vision System
Components, Machined Metal Assemblies, Rubber
Components and Injection Moulding Tools. In addition to
direct exports, most of the JV companies are also exporting
to their own collaborators like export of wiring harnesses
to SWS Japan and SEWS Hungary, and rubber products
to WOCO, Germany.
We are setting
an ambitious
target of making
MSSL a
Billion Dollar
Company by
the year 2010
In the year 2000 we had targeted 30% of
total sales to come from global customers,
exports today amount to 29% of sales. Over
these years, we have strategically created
a network of overseas manufacturing
facilities to serve our export customers. By
the year 2010, we now envisage that 60%
of our consolidated turnover will cater to the requirements
of our customers outside India. Overseas sales are poised
to be our major growth driver, while we will ensure that we
remain our customers’ first choice in India.
Our major focus has been on European market. We have
created a network of manufacturing locations and
representative offices. We have Injection Moulding and
Precision Machining facilities in Germany, Wiring Harness,
Silicon Rubber Injection Moulding and Injection Moulding
Tool manufacturing facilities in Sharjah and Wire
manufacturing plant in Sri Lanka in addition to offices in
Sharjah, Singapore, Austria, Germany and UK and design
& logistics centre in Ireland. We have a strong presence in
wiring harnesses for 2-wheeler market in Europe with supplies
to major 2-wheeler manufacturers like Piaggio, Derbi, Ducati,
In line with vision 2005, the largest customer
is contributing to 27% of the consolidated
turnover. We now expect, by 2010, we will
have a customer profile where contribution
from any individual customer in our turnover
shall not be more than 20% of the total
turnover. Our approach will be to continue
to service our existing customers and
markets, and at the same time expand the
overall customer base/markets. We have
reduced segmental dependence significantly
and have started serving different customer
segments as discussed in the preceding
section. The Automotive Industry will remain
a major segment, but within that we are
now serving the entire cross-section of the
industry and not only to a limited segment.
Applying the same approach to our product range, we are
reducing dependence on any single product category. From
a near 100% dependence on wiring harnesses in the year
1999-2000, now we have other product segments contributing
to approximately 28 % of our turnover. Our effort will be to
expand all our product segments to an equitable level
according to their potential and have a more balanced product
portfolio. This also brings us closer to our vision of being a
globally preferred systems solutions provider. The advantages
of this strategy are already visible from the fact that for certain
customers, where we did not have a presence in wiring
harnesses, we have attained the status of major supplier for
plastic components and assemblies. The polymer division of
MSSL is a major supplier of plastic components, assemblies
and modules to Ford India. It has also received the Global
Supplier of the Year award for 2004 from General
3
Motors. Toyota also appreciated efforts of MSSL team by way
of Appreciation Award in recognition of Excellent Effort and
Commitment in the area of Smooth Production Preparation
for the INNOVA PROJECT.
We have improved our performance on parameters of quality,
cost, delivery, development and management. Our efforts
have been recognized by our customers which reflects in the
fact that in past 5 years we have received awards on overall
best performance, quality, delivery, cost and improvements
from our major customers as well as from our collaborators.
We had aimed at achieving a ROCE of 40%. We have been
able to achieve a ROCE of 39% in 2005. This is despite the
fact that interest rates are comparatively down from the year
2000 level. We will strive to maintain these levels of business
ROCE though now we operate in many economies where
interest rates are lower than India.
4
We had made a commitment to our investors that we will
maintain strong positive cash flows. We have pursued only
sustainable, profitable and positive cash generating business
in these five years. Going forward we will try to be even more
consistent and generate enough free cash to cover dividend
payouts. Our philosophy is that net block should be funded out
of net worth and not borrowing. In addition to the company’s
policy to reinvest the depreciation on replacements and up
gradation of its facilities, we have added significant capacities
across our businesses over the last two years. While the amount
of depreciation charged to company’s account will be sufficient
for maintenance of existing capacity, MSSL would continue to
make significant investments for creating additional capacities
based on its outlook for next 2-3 years. In order to finance the
capex as well as acquisitions and prepare for future growth,
MSSL had appointed Nomura International (Hong Kong) Limited
and ICICI Securities Inc. as lead managers for issue of FCCB.
I am pleased to inform you that the company has successfully
signed subscription agreement for issue of Euro 50.3 millions,
Zero Coupon foreign currency convertible bonds which will
have a maturity of 5 years . This will be optionally convertible
at a conversion price of Rs 111.45 per share, at a premium of
50% over the closing price of the shares of the company on
7th July 2005. The foreign currency convertible bonds will carry
a zero coupon rate with a yield to maturity of 4.8% per annum
at the end of the tenure, if not converted into shares during this
period.
MSSL has been consistently improving its performance year
on year which raises the benchmarks for our future
performance, putting pressure on us to improve further. The
market has also acknowledged our performance by way of
enhanced valuation of our enterprise. I assure all the
stakeholders that we would continue to be driven by our
approach to free cash and return on capital employed and not
just top line growth or asset creation. Our stated dividend
policy of 40% payout of the company’s profits shall shift to
40% of the consolidated profits by 2010.
We have set tough targets for ourselves for 2010. We will
maintain our customer focus. Our customers have been our
guiding force and most of our growth has been customer
driven. We will strive to develop newer and better products
and acquire new technologies to service our customers as
Full System Solutions Provider. We are trying to create more
value for our customers and become a single source for
multiple products and services. This enhanced value will move
beyond conventionally supplied products to areas of engineering
support and technical services.
We have created a global network of facilities and support
functions that will form the foundation of our future growth. It
has also given us the opportunity to create a truly international
work culture where people from different countries and cultures
will have a healthy interchange of ideas and working
methodologies. It will also bring us more close to our customers
in terms of their culture, language and approach.
Our relationships with our collaborators have grown from
strength to strength. Starting from a technical assistance, we
now have three joint ventures with WOCO. Each of the JVs is
doing very well and contributing to the overall strength of the
MSSL Group. Our relationship with our principal partner,
Sumitomo Wiring Systems Ltd. (SWS), Japan has entered a
new dimension. SWS has reaffirmed its commitment to India
and the importance it gives to its Indian operations by involving
MSSL in its operations on a global level. I feel privileged being
appointed as an Executive Officer of Sumitomo Wiring Systems,
Ltd (SWS) by Board of Directors of SWS at the meeting held
on 28-6-2005. I am grateful to SWS management for having
so much faith in our partnership. This relationship built on trust
has become stronger and stronger in over 22 years of our
association. The opportunity to export back to our collaborators
is a huge premium that we have over the others because they
are more willing to work with us as they are much more sure
of quality, cost and delivery. We are thankful to our collaborators
who have always supported us and helped us in our growth.
The world is looking at Indian businesses to outsource Auto
Components from India. We believe, we are at the right place
at the right time.
V. C. Sehgal
Noida, 9-7-2005
T O G E T H E R
W E
M A K E
I T
H A P P E N
MSSL : 2000 - 2005
Consolidated
9,000
9,000
8,000
8,000
7,000
7,000
0
2,000
1,000
0
1000
200
300
46%
Average ROCE
46%
36%
268
200
177
29%
132
100
50
69
78
46
0
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Dividend Amount
Dividend to PAT
428
39%
1500
50%
40%
30%
26%
21%
1000
20%
955
1,609
742
500
1,138
18%
0
10%
0%
Net Worth
Dividend to PAT (%)
150
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
45%
30%
2001-2002
Average RONW
43%
42%
250
Dividend (Rs. in Millions)
Debt
2004-05
40%
948
1,741
702
1,388
660
921
978
907
416
1,080
685
0%
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
2003-04
47%
1,009
20%
10%
0
Networth/Debt (Rs. in Millions)
37%
29%
26%
25%
39% 40%
39%
22%
2000
19%
28%
30%
25%
40%
30%
500
593
390
Dividend (Rs. in Millions)
2500
2002-03
PAT
2002-2003
Debt
2003-2004
ROCE/RONW (%)
Average Return on
Capital Employed /
Net Worth
50%
ROCE/RONW (%)
1000
Net Worth
Dividend Payout
PBT
2000
1500
2001-02
PAT
2500
5
0
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
PBT
312
Rs. in Millions
485
0
600
400
2004-05
649
800
621
681
291
170
271
165
200
192
160
400
413
290
600
2003-04
855
1000
850
1200
2002-03
1,131
2001-02
1200
800
Rs. in Millions
Profit Before Tax /
Profit After tax
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
858
1,000
3,000
1,238
1,530
4,188
2,965
293
2,811
2,303
4,000
2,200
3,334
Rs. in Millions
3,000
2,000
5,000
4,572
4,000
5,899
6,000
5,536
5,000
7,812
170
6,000
Rs. in Millions
Net Sales
Stand-alone
2004-2005
Average ROCE
Average RONW
We would continue to be driven by
our approach to free cash and
return on capital employed and not
just top line growth or asset creation
Financial Highlights
MSSL: Stand-alone
2002-2003
2003-2004
2004-2005
Rs. in Millions
% Change
w.r.t Previous Yr.
2,638.50
695.85
3,334.35
710.85
412.69
289.87
156.59
923.41
685.38
1.23
75%
3,622.76
948.93
4,571.69
982.85
681.03
484.51
156.59
1,231.26
659.94
2.06
100%
4,477.61
1,057.90
5,535.51
1,133.78
849.99
620.95
234.89
1,506.07
702.47
2.64
100%
23.6%
11.5%
21.1%
15.4%
24.8%
28.2%
50.0%
22.3%
6.4%
28.2%
0.0%
Sales - Net of Excise
Domestic
Export
Total Sales
Profit Before Interest, Dep. & Tax (PBIDT)
Profit Before Tax (PBT)
Profit After Tax (PAT)
Equity Capital
Reserves and Surplus
Loan Funds
Earning Per Share* (EPS) - Rs.
Dividend (%)
*Figures have been recasted on present face value of Re. 1/- per share for 2002-03
Net Sales & Profit After Tax
5,536
621
5,000
4,000
4,572
500
485
3,334
3,000
600
400
300
290
200
1,000
100
0
2002-03
2003-04
Net Sales
2004-05
0
40%
35%
3,000
30%
26%
2,500
2,000
1,500
25%
20%
15%
1,000
10%
500
0
2002-03
2003-04
Net Worth
PAT
Loans
5%
2004-05
0%
ROCE %
2004-05
Sales Profile
Sales Domestic Vs Exports
Others
39%
Maruti
37%
H.P.
3%
Piaggio
4%
TKML
5%
Honda siel
5%
Exports
19%
Ford
7%
T O G E T H E R
Domestic
81%
W E
M A K E
I T
H A P P E N
ROCE %
2,000
PAT (Rs. in Million)
Sales (Rs. in Million)
6,000
700
702
800
39%
1741
7,000
37%
3,500
660
900
1388
8,000
45%
4,000
685
1000
1,080
9,000
Net Worth / Loans (Rs. in Million)
6
Capital Employed & Average ROCE
Financial Highlights
MSSL: Consolidated
Sales - Net of Excise
Domestic
Export
Total Sales
Profit Before Interest, Dep. & Tax (PBIDT)
Profit Before Tax (PBT)
Profit After Tax (PAT)
Equity Capital
Reserves and Surplus
Loan Funds
Earning Per Share* (EPS) - Rs.
2002-2003
2003-2004
2004-2005
Rs. in Millions
% Change
w.r.t Previous Yr.
3,129.00
1,059.45
4,188.45
769.34
435.29
311.91
156.59
982.06
742.49
1.33
4,384.12
1,515.23
5,899.35
1,203.91
857.50
652.38
156.59
1,452.30
954.62
2.78
5,581.84
2,230.41
7,812.25
1,501.71
1,130.53
839.97
234.89
1,964.79
1,238.18
3.58
27.3%
47.2%
32.4%
24.7%
31.8%
28.8%
50.0%
35.3%
29.7%
28.8%
*Figures have been recasted on present face value of Re. 1/- per share for 2002-03
Net Sales & Profit After Tax
4,188
500
4,000
400
3,000
300
312
200
1,000
100
0
2002-03
2003-04
Net Sales
2004-05
0
1238
26%
2,000
1,500
PAT
0
30%
25%
20%
15%
1,000
500
10%
2002-03
2003-04
2004-05
Net Worth
Loans
5%
0%
ROCE %
2004-05
Sales Profile
Sales Domestic Vs Exports
Others
36%
Maruti
27%
TKML Honda
Siel
4%
4%
NMHG
5%
Woco
6%
Ford
6%
Hyundai
12%
7
Exports
29%
Domestic
71%
ROCE %
2,000
2,500
40%
35%
3,000
2200
600
39%
955
652
PAT (Rs. in Million)
Sales (Rs. in Million)
700
5,899
6,000
800
3,500
45%
1609
7,000
40%
742
900
840
Net Worth / Loans (Rs. in Million)
7,812
8,000
5,000
4,000
1000
1,138
9,000
Capital Employed & Average ROCE
Management Discussion & Analysis
The year 2004-05 has been another successful year for
your company. Almost all the segments of the company
have shown good growth both in terms of turnover as well
as profitability.
MSSL Performance :
The performance of the business segments of the company
in the year 2004-05 are as follows:
Consolidated Sales
Product Group
2004-2005
2003-2004
% Increase
Wiring Harness,
Cords & Wires
5,647
4,211
34%
Plastic Components
1,095
727
51%
Rubber Components,
Heat Sinks & Others
1,070
961
11%
Total
7,812
5,899
32%
Stand-alone Sales
8
Product Group
Wiring Harness,
Cords & Wires
2004-2005
2003-2004
% Increase
4,162
3,186
31%
Plastic Components
979
680
44%
Rubber Components,
Heat Sinks & Others
395
705
(44%)*
5,536
4,571
21%
Total
(*Elastomer division transferred to a new JV)
Wiring Harness
MSSL has plants spread across the country at strategic
locations to efficiently service the requirements of its
customers, producing over 3500 different types of harnesses
with an annual production of about 13 million nos. The sales
of wiring harnesses (constituting over 70% of the consolidated
business) grew by 34 % for the year on consolidated basis
and by 31% on stand-alone basis over the previous year.
The sales of wiring harnesses in the Domestic Market grew
by about 18 % for the year under review. MSSL has
successfully commenced manufacture and supply of wiring
harnesses to Maruti Udyog Limited for its new model “Swift”
,M&M for “Scorpio CRDi” and to Toyota Kirloskar Motor for
“Innova”. In addition, the company’s joint venture KIML began
production of harnesses for “Getz” and “Elantra” for
Hyundai.The company’s growth was mainly contributed
by higher sales to Honda Siel, Maruti, Hyundai Motors
and DCIL in the passenger car market and sales to Hero
Honda and Honda Motor Cycle & Scooters in the two
wheeler segment.
During the year Wiring Harness exports from India grew
from Rs. 277 million to Rs 727 million including wiring
harness exports of Rs 188 millions (previous year Rs 111
millions) to our Joint Venture partner Sumitomo Wiring
Systems (SWS). The company’s increased exports from
India to Piaggio, Cummins and J C Bamford mainly
contributed to the company’s growth of exports. In addition
to these, MSSL Mideast started exports of harnesses to
SEWS, Hungary from its Sharjah plant.
During the year ending March 2005, the company has
expanded its facilities at Noida with a new dedicated unit for
exports. Due to the imbalance created by part implementation
of VAT in a few states, the company is relocating some of
its facilities close to the customers. MSSL Mideast, a 100%
subsidiary of MSSL, is adding another facility for manufacture
of wiring harnesses to service increased shifting of
manufacturing from Hungary to Sharjah. In line with the
growth in the wiring harnesses capacities/requirements, the
company has also expanded its wire manufacturing facilities
by 33% approximately. The wire division will further expand
the capacity by over 25% by the year 2006-07.
During the year 2005-06, we expect to maintain our growth
momentum in the domestic market, apart from increased
exports to Europe from India as well as Sharjah.
Plastics
Motherson Automotive Technologies & Engineering (MATE),
the plastic division of the company, which manufactures wide
range of injection moulded components & assemblies, blow
moulded components, compression moulded door trims and
integrated modules, grew a healthy 44% during the year.
We continue to work towards our strategy of increasing our
content per car. During the year 2004-05, the main growth
of this division was contributed by Honda Siel, Ford India
and Hyundai Motors. The company started a new unit at
Chennai to cater to the requirements of Hyundai Motors and
for exports to GM Holden, Australia, that will commence in
the year 2005-06. During the year 2004-05, the company
started supply of plastic parts to Hyundai for “Getz” & “Elantra”
and Toyota Kirloskar Motor for “Innova”, in addition to supply
T O G E T H E R
W E
M A K E
I T
H A P P E N
of parts (including large parts like Bumpers etc.), to Ford for
“Fusion”. The division is now establishing its core
competencies in manufacturing of large plastic parts as well
as in supply of body colour painted parts to OEM’s. Apart
from giving a higher content in terms of value, this also
enables MSSL to position itself as a Module Supplier to the
Car Manufacturers. In addition to supplying products to
automobile manufacturer, it is making components and
assemblies for other industries including white goods
industry. It has established a unit at Pondicherry for
supplies to Whirlpool.
In addition to manufacture and supply of plastic components
from units in India, the company’s subsidiary MSSL Mideast
supplied components to Ford Europe by getting the same
manufactured through contract manufacturing at Austria. As
an extension to this supply chain, MATE Chennai shall be
manufacturing parts for Ford Europe as a part of the contract
awarded by Ford to MSSL Mideast.
MATE is expanding its facilities at Chennai to build capacity
for catering to increasing requirements of Ford India Limited
and also for export of components to Ford Europe. As
informed last year, the division is also setting up facilities at
Manesar, which will become operational in this year. This
division would continue to witness healthy growth. During
the year 2005-06, the company revenues are expected to
grow on account of exports from India as well as supply of
additional /new parts to Ford.
grew from Rs 269 millions to Rs 412 millions, showing a
growth of 53 % over previous year.
The company’s Special Products Division which manufactures
Heat Sinks faced drop in off-take by its customer due to
obsolescence of the models for which it was supplying the
parts. Exports of heat sinks to HP amounted to Rs 189
millions (Previous Year : Rs 273 millions), witnessed a drop
of 31 % due to consolidation of this business. During the
year, the unit was re-located to a new unit and is now working
to increase its customer base.
Performance of Subsidiaries and Joint Ventures:
The summary of performance of company subsidiaries and
joint ventures is as follows:
Subsidiaries / Joint Ventures
Rs in Million)
MSSL Capital
Holding Employed
Company
Gross Sales
Profit After Tax
2004-05 2003-04 2004-05 2003-04
MSSL Mideast
(FZE)
(+)
100% 617.52 783.75 435.22 112.38 130.19
MSSL Ireland
Pvt Ltd.
(# +)
100%
3.10
15.65
12.08
(3.7)
(6.44)
Motherson Electrical
Wires Lanka Private Ltd.(x)
100%
94.59 172.98
8.46
15.77
(6.64)
Draexlmaier &
Motherson Electrical
Systems India Ltd.
74%*
47.60 250.08 205.32
0.15
(3.03)
Rubber Components, Heat Sinks and others
Motherson PUDENZ
WICKMANN Ltd.
56.10%
38.80
71.04
65.19
4.81
6.11
On consolidated basis, this business segment has grown
by about 11%. The main growth came from Automotive Mirror
sales as well as from higher exports of silicon rubber products
from Woco Motherson Ltd. (FZC), Sharjah.
MSSL Hag Toolings
Ltd. (FZC)
(# +)
53.30%
31.76
29.82
7.71
50.01% @ 110.77 342.25
---
19.39
---
50% 317.11 1584.06 1212.79
77.34
48.99
49% 133.81 472.99 307.54
54.27
18.78
57.51
39.51
As informed in last year’s Annual Report, the Elastomer
Division of the company was transferred to company’s
subsidiary – a joint venture named Woco Motherson
Elastomer Limited, hence the figures of this year are not
strictly comparable with last year on stand alone basis.
Details of this business are discussed in the respective
companies under the Head “Joint Ventures”.
The sales of Rear View Mirrors, carried out through the
company’s joint venture, Schefenacker Motherson Limited
Woco Motherson
Elastomer Ltd.
Kyungshin Industrial
Motherson Ltd.
Schefenacker
Motherson Ltd.
Woco Motherson
Ltd. (FZC)
(4.46) (13.12)
(*)
33.33%
111.26
198.4 154.80
(* # +)
* Year ended December 2004
# Through MSSL Mauritius Holdings Ltd.
+ Considering Parity at Euro = Rs 56.51 ( Previous Year 1 Euro = Rs 53.38)
x Considering Parity at 1 Sr Rs = Rs 0.442 (Previous year 1 Sr Rs = Rs 0.4473)
@ Represents transfer of Elastomer Division from MSSL w.e.f. 1-6-2004
9
MSSL Mideast (FZE) - (Subsidiary)
The company is specializing in manufacturing of Wiring
Harnesses for Material Handling and Off-road Vehicles.
During the year, the focus of the Company has been on
growth in the automotive segment. During the year the
Company has successfully started supplies to Sumitomo
Electric Wiring Systems (SEWS) Hungary for meeting the
requirements of European car manufacturer, pursuant to
the award of business under Global Production Policy
(GPP) of Sumitomo Wiring Systems Ltd., Japan. The
Company has also consolidated its position with the existing
non-automotive customers including NMHG, MCFE,
Fritzmeier, Schneider, Claas and Ventrex.
10
During the year the Company has done exports of Euro
13.87 Million (Previous year Euro 8.07 Million), recording
a growth of 72% and a Profit after tax of Euro 1.93 millions
as compared to Euro 2.44 millions in the previous year.
There were substantial costs incurred for new business
added during the year and the turnover from these business
was not for the full year, thereby affecting the profits for
the year.
company. At the Board meeting held on 27-5-2005, the
Board decided to merge DMSIL into MSSL w.e.f. 1-4-2005,
subject to necessary approvals. The financial performance
of this strategically important business would improve from
the current year on account of operating advantages, once
the merger is completed.
Motherson Electrical Wires Lanka Pvt. Ltd
(MEWL) - (Subsidiary)
MSSL has set up a 100% subsidiary - Motherson Electrical
Wires Lanka Pvt. Ltd. (MEWL), a wire manufacturing facility,
in Sri Lanka. MEWL commenced commercial operations
in January'2004. In the first full year of operations (200405), the company did a turnover of Rs 173 millions, with
Profit after Tax of Rs 15.77 millions. The plant is now
operating at almost full capacity and we plan to expand
the capacity of this unit by 16 % in the current year.
MSSL HAG Toolings Limited (FZC) (MHTL)
- (Subsidiary)
MSSL Mideast, strategically located at Sharjah, is the main
window and the manufacturing base for wiring harnesses,
plastics and new products for the European Market. This
base supports the forward locations in the mainland Europe.
As of now, MSSL Mideast and other joint ventures of MSSL
in Sharjah employ approximately 500 personnel coming
from India, Sri Lanka, Germany, Ireland and Australia.
The company’s subsidiary, MHTL engaged in the
manufacture of moulds at Sharjah, improved its
performance, as compared to the previous year. The
company enhanced it product range by manufacturing
moulds up to 300 tonnes (earlier it manufactured moulds
up to 150 tonnes only ) and also commenced moulding of
plastic components to support MSSL Mideast for its plastic’s
customers. These operations will enable the group to offer
an enhanced product range to its European customers.
Draexlmaier & Motherson Electrical Systems
India Limited (DMSIL) - (Subsidiary)
Woco Motherson Elastomer Limited (WMEL)
- (Subsidiary and Joint Venture)
DMSIL is engaged in the manufacture of wiring harnesses
and cockpit assembly with Daimler Chrysler India and John
Deere as its customers. As reported in the last year’s
Annual report, Lisa Draexlmaier and MSSL examined
various options to reconstitute the JV and decided to have
Technical Assistance Agreement with DAS - Draexlmaier
Automotive Systems GmbH for wiring harnesses supplies
to DCIL. MSSL has also purchased the entire holding held
by Lisa Draexlmaier ( 26% of the equity and Preference
capital ), which has made DMSIL a 100% subsidiary of the
Woco Motherson Elastomer Limited (WMEL), a joint venture
between WOCO and MSSL, has taken over the Elastomer
Division of MSSL w.e.f. 1-6-2005. Presently, the company
is exporting most of its production to WOCO, Germany. In
Euro terms, the exports from India to WOCO increased
from Euro 6.74 millions in 2003-04 to Euro 7.13 millions in
2004-05, showing a modest increase of 6%, constrained
by the capacity at Noida plant. The exports to Woco are
expected to grow once the company’s third joint venture
WMART being set up at Kandla becomes operational.
T O G E T H E R
W E
M A K E
I T
H A P P E N
Motherson PUDENZ WICKMANN Limited
(MPWL) - (Subsidiary and Joint Venture)
Schefenacker Motherson Ltd. (SML)
- (Joint Venture)
Motherson PUDENZ WICKMANN Limited (MPWL is a JV
between Wickmann Werke GmbH, Wilhelm Pudenz GmbH,
Germany and Motherson Sumi Systems Limited). The
company is engaged in the business of manufacturing
Blade Fuse Links and Fuse Holders for Automotive
Industry. Trading division of the company is engaged in
distribution of Circuit Protection components and has
added discrete Semiconductor products viz. Diodes,
Rectifiers, Transistors & Mosfets to their product range
which find extensive usage in Electronics and Electrical
industry. The principals include Wickmann Werke, Wilhelm
Pudenz and newly added M/s Taiwan Semiconductors.
The growing product segments are Re-settable fuses and
fuses for UPS and Invertor segment.
A joint venture between MSSL and Schefenacker
International, Germany, Schefenacker Motherson Ltd. is a
black box designer and manufacturer of Rear-Vision
Systems for automobiles. The product range includes
Interior and Exterior Automotive Mirrors (Manual, Remote
and Electric).
This year also saw merger of Heinrich Industrie AG (holding
company for Wickmann Werke and Wilhelm Pudenz) into
Littelfuse Inc., the world leader in circuit protection products.
We are exploring new relationship and finding possibilities
for adding new products to this company.
Kyungshin Industrial Motherson Ltd. (KIML)
-(Joint Venture)
Kyungshin Industrial Motherson Ltd. (KIML) is a joint venture
between Kyungshin Industrial Co. Limited of South Korea
and Motherson Sumi Systems Limited. Kyungshin Industrial
Co. Limited is a leading manufacturer of integrated wiring
harnesses in Korea and the major supplier to Hyundai
Motors, Korea. During the year 2004-05, KIML's turnover
increased to Rs 1357 millions from Rs 1044 millions and
correspondingly PAT increased from Rs. 49 millions to Rs
77 millions. The Board of Directors of KIML have proposed
a dividend of 30% (previous year 20% ), subject to approval
of the shareholders.
During the year 2004-05, KIML has expanded its
manufacturing facilities and consolidated the facilities by
merging the units into a new plant. This joint venture, being
dedicated to Hyundai Motors has built capacities in line
with customer’s growing requirements.
SML has consistently improved its performance. During
the calendar year 2004, this joint venture registered a
turnover of Rs. 412 millions and PAT of Rs. 54 millions,
showing a growth of 54% and 189% respectively over the
previous year. The operations of this joint venture have now
stabilized and would continue to perform at these levels.
Woco Motherson Ltd. (FZC) (WML)
– (Joint Venture)
Woco Motherson Ltd. (FZC) is a joint venture of the Sumi
Motherson Group, and Woco Industrietechnik GmbH,
Germany. Located in Sharjah Airport International Free Zone,
WML specializes in Liquid Silicon Rubber Injection Moulding.
The product range includes products for Automotive, Medical
and Kitchen Appliances, etc. During the calendar year 2004,
WML recorded a turnover of Euro 3.51 million, a growth of
22% over the previous year. We expect this joint venture to
continue to perform well in future.
Wo c o M o t h e r s o n A d v a n c e d R u b b e r
Technologies Limited (WMART) - (Joint Venture)
WMART, a joint venture between WOCO and MSSL is
setting up facilities for manufacturing of rubber and rubber
to metal/plastic components at SEZ, Kandla. Consequent
upon allotment of shares to WOCO and MSSL (for which
application money has been received in May 2005), the
shareholding of WMART shall be held 2/3 by WOCO and
1/3 by MSSL, though as on 31st March 2005 WMART is
100% subsidiary of MSSL. The total investment on this
project in Phase-I is estimated at Rs 320 millions and the
unit is expected to commence commercial production in
the 2nd half of 2005-06.
11
Support Subsidiaries Companies
achieve 30% of our sales from global customers by the
year 2005”.
MSSL together with its wholly owned subsidiaries has
incorporated overseas 100% subsidiaries, in addition to two
holdings companies, to support its international purchasing
and facilitating communication with the market. The summary
of results of these subsidiaries is described below:
Export Sales
Product
Group
Country
of
operation
Currency Investment
of
by
business MSSL as on
31-3-2005
12
Profit
after tax
Mauritius
Euro
29.67
9.01
MSSL GmbH
(subsidiary of
MSSL Mideast
(FZE))
Germany
Euro
14.13
(0.23)
-
MSSL Handels
GmbH
Austria
Euro
1.98
(1.47)
(0.64)
U.K.
GBP
0.09
0.31
-
Singapore
SGD
2.68
0.08
(0.04)
Ireland
Euro
2.83
(3.70)
(6.44)
MSSL GB Limited
(subsidiary of
MSSL Mideast
(FZE))
MSSL(S )
Pte Limited
MSSL Ireland
Limited (Subsidiary
of MSSL Mauritius
Holdings Limited)
14.20
Rates used for conversion
Euro 1= Rs 56.51(Previous year: Rs 53.38)
Singapore 1 $ = Rs 26.81 (Previous Year: Rs 26.56)
Rubber
Components, TOTAL
Heat Sinks
& Others
2004-05
1,312
169
749
2,230
Consolidated 2003-04
680
73
762
1515
2004-05 2003-04
MSSL Mauritius
Holding Limited
Wiring
harness, Plastic
HT Cord Components
& Wires
Year
Figures in Rs / millions
Name of the
company
Rs in Million
Stand alone
% increase
93%
131%
(2%)
47%
2004-05
727
49
281
1,057
2003-04
277
46
625
948
% increase 162%
7%
(55%)
11%
Out of the total exports of Rs 2230 million, 77% were Euro
denominated, 12% were US Dollar denominated, 8% were
Japanese Yen denominated and the balance were in other
convertible currencies.
New Ventures/Initiatives
During the year 2004-05,MSSL Mideast (FZE), a wholly
owned subsidiary of MSSL has incorporated a holding
company “MSSL GmbH” in Germany for the purpose of
holding investments in new companies / joint ventures to be
incorporated/acquired in that region. MSSL GmbH has, in
April 2005, signed an agreement to form a joint venture
“Mothersonsumi Reiner GmbH” (MSR ) with Reiner Präzision
GmbH who shall be holding 20% of the equity capital of
MSR. MSR has acquired the running business of Reiner
Präzision GmbH w.e.f. 1st April 2005 – the annual turnover
of Reiner Präzision GmbH was Euro 6 millions p.a. and is
manufacturing machined parts for Tier 1 suppliers to the
European automobile manufacturers.
Customer Recognition
GBP 1 = Rs 82.19
The Board would like to have on record the support extended
by these subsidiaries to MSSL and its other subsidiaries for
achieving the growth.
Exports
Consolidated exports grew to Rs. 2230 millions as compared
to Rs. 1515 millions, growing at a healthy rate of 47%.
Exports constitute almost 29% of the total sales of the
company - close to our target set in year 1999-00 - “ To
During the year 2004-05, MSSL & its Joint Ventures received
Gold Award for Quality from Honda Siel Cars India Ltd., three
awards from Maruti Udyog Ltd. (Suzuki) - Outstanding Overall
Performance, Award for Superior Performance Through Kaizen
and Award for Cost Reduction Through VA / VE, the prestigious
Global Supplier of the Year Award from General Motors and
Overall Best Performance Award from Hyundai Motors. In
addition to this MSSL also received Quality Improvement
T O G E T H E R
W E
M A K E
I T
H A P P E N
Award from Sumitomo Wiring Systems Ltd. and award from
Toyota for Excellent effort and commitment in the area of
Smooth preparation for the Innova project.
Cash Flow Analysis
(Rs. in millions)
MSSL
MSSL Consolidated
2004-05
%
2004-05
%
1,133
78%
1,506
76%
Non - Operating Income
8
1%
1
0%
Refund of Loan From Subsidiary
-
-
18
1%
187
13%
402
20%
-
-
53
3%
123
8%
-
-
1,451
100% 1,980
100%
Net Capital Expenditure
801
55% 1,015
51%
Increase in Working Capital
100
7%
255
13%
Net Debt Repayment
154
11%
180
9%
17
1%
-
-
3
0%
-
-
24
2%
48
2%
Dividend Payout 2003-2004
176
12%
176
9%
Corporate Taxes
177
12%
222
11%
1,452
100%
1,896
96%
(1)
0%
84
5%
SOURCE OF CASH
Operating Profit Before
Working Capital
Increase in Debt
Proceeds from minority
Share holders'
Consideration Received on
transfer of erstwhile
Elastomer Division
Total
APPLICATION OF CASH
Investment in Subsidiaries
Loan to Subsidiary
Interest Charge & Lease Rental
Total
Increase / (Decrease) In
Cash & Cash Equivalents
of Rs. 801 millions on account of capital expenditure. The
major break up of the investment is as follows:
Land & Building
Plant & Machinery
- Wiring harness (including wire)
- Plastics
- Heat sinks & others
- TOTAL
Rs 461 Mn
Rs 116
Rs 120
Rs 8
Rs 244
Mn
Mn
Mn
Mn
During the year, new capacities have been set up across
the entire business portfolio. Wiring Harness Division has
shifted its export unit at Noida to new and larger premises
in order to meet the increased export volumes. The wire
plant at Noida has been shifted to a new building and its
facilities are being upgraded. MATE has also set up units at
Bangalore and Pondicherry (as stated earlier), apart from
the 3rd plant at Chennai. The company’s subsidiary MSSL
Mideast has set up facilities for manufacture of wiring
harnesses for exports to Hungary. Similarly, the company’s
joint venture, KIML has expanded its capacity for manufacture
of wiring harnesses at Chennai. While the amount of
depreciation charged to P/L account is sufficient towards
maintenance capital expenditure, the company requires
additional capital expenditure for expanding its capacity in
advance, prior to launch of the new vehicle models of its
customers.
During the year 2005-06, the company would be making
investments in the following areas:
1.
2.
MSSL's payout for the year 2004-05 is proposed at 43% of
PAT v/s 36% of PAT in the previous year.
3.
Capital Expenditure
4.
MSSL had a cash outflow of approximately Rs. 1015 millions
(net) on expansion/ setting up of new facilities during the
year 2004-05. On stand-alone basis, MSSL had a net outflow
5.
Setting up of new facilities for manufacture of wire
harnesses as well as expanding and consolidating
the current manufacturing plants to align with our
customers’ enhanced requirements as well as to
optimize resource utilisation in India.
Expansion of capacity for manufacture of wiring
harnesses as well as adding plastic moulding facilities
at MSSL Mideast, Sharjah.
Augmentation of wire manufacturing capacities at
Noida and Sri Lanka
Setting up of new manufacturing facilities for Plastic
Moulding at Haryana.
Setting up of a New Plastic Moulding and Higher Level
Assembly unit at Chennai for meeting the enhanced
requirements of our customers.
13
6.
Facilities for manufacture of rubber components at
Woco Motherson Advance Rubber Technologies
(WMART)
The total investment on the above projects is estimated at
Rs 1000~1250 millions approximately.
In addition, MSSL is contemplating investments on
improvements and additional capacities for expanding the
business of the acquired companies.
At the Extra –Ordinary Shareholders meeting held on 7-52005, the shareholders have approved raising of long term
funds up to Rs 3000 millions.
Profits
14
Consolidated sales & Profit after Tax both grew by 32% as
compared to the last year. Standalone sales grew by 21 %
to Rs. 5536 Million, while profit after tax grew 28% to Rs.
621 Million over the previous year. Apart from achieving
higher internal efficiencies in all the divisions & subsidiaries,
we benefited from the growth in the domestic automotive
market and strengthening of the Euro internationally, though
there has been marginal impact of increases in raw material
costs due to high oil and commodity prices. A large part of
company's exports is Euro denominated.
The company was able to reduce its finance costs significantly
by better working capital management & by taking advantage
of low interest regime. Further, the interest costs for the year
2004-05 were lower on account of one time add back of Rs
4.9 millions approximately.
Our focus on cost reduction to remain competitive continues.
While investments are being made for capacity expansion,
we continue to remain a lean and flexible organization in line
with the business needs of an ever changing environment.
Internal Control Systems
The company has effective internal control systems,
commensurate with its size covering all areas of operations.
Auditors of the Company periodically review these systems
and suggested/desired improvements are implemented on
a continuous basis.
Human Resources
All our employees/associates are an integral part of our
company and their involvement & participation is the key
to our success. Our company has endeavored to
encourage maximum employee participation to create a
“we” feeling through “in-office” as well as “out of office”
activities like suggestion schemes, skill competition, sports
competitions, painting competition for employee's children,
celebration of festivals, annual day celebration, cultural
activities, picnics etc.
To carry this spirit forward, we have further strengthened the
Quality Circle Movement by increasing the number of quality
circles in MSSL to more than 60. Contributions of our
associates/ employees are regularly appreciated at our inhouse conventions. Our quality circles have also won awards
in competitions of Quality Circle Forum of India, Toyota
Kirloskar Motor Supplier's association and ACMA Quality
Circle Convention.
We as members of Motherson Sumi Systems Ltd. embarked
on the task of enhancing the technical skills and behavioral
competencies of our employees to realize our organizational
goals of delighting our customer, improving the quality of our
product and processes, enhancing productivity and reducing
wasteful activities, thus reducing costs.
Environment, Health and Safety
MSSL is committed to protecting the environment and the
health and safety of our people and those associated with
us. We strive to be an environmentally responsible company
by developing safe, efficient and environmentally conscious
products and manufacturing processes. A major eco-friendly
measure undertaken has been the development of lead-free
wires by the company. Most of the company’s facilities are
ISO -14001 certified.
Risks & Concerns
The company operates its business in two segments namely
Automotive and Non Automotive. The domestic market
revenues are largely dependent on the growth in the Indian
T O G E T H E R
W E
M A K E
I T
H A P P E N
Automotive market. All the segments namely, passenger car,
commercial vehicles and two wheeler segments have grown
in 2004-05. The following table shows the growth in the
domestic market:
Figures in Thousand (Nos)
Segment
2003-04
2004-05 % growth
Passenger Vehicles
1000
1215
21%
Commercial Vehicles
275
350
27%
5625
6527
16%
Two Wheelers
Source: SIAM
The cyclical nature of the automotive industry and the effects
of a slow-down in economic growth affect our performance.
Global foreign exchange volatility and high crude oil prices
are a matter of concern for the company. To overcome this
we are working on balancing our business portfolio and
increasing markets served by us. We are also aggressively
stepping up our export efforts by establishing a strong global
presence, which will help us counter domestic cyclicality.
The presence of major global players in the industry in the
domestic market continues to keep competitive pressures
high. We continue to work on streamlining the company,
cutting costs and improving efficiency. With our intense focus
on innovation, quality and customer satisfaction, we hope
to strengthen our position in the domestic market even as
we continue to grow overseas. Our established reputation
as a world-class supplier of components, modules and
integrated systems and our long-standing customer
relationships gives us a competitive edge.
Non-automotive business constitutes around 14% of the
groups business and 9% of MSSL business. The business
mainly consists of export of Heat Sink components for the
Computer Industry, Plastic Components for non-automotive
applications, Wiring Harnesses for Material Handling & Earth
Moving Equipments and other miscellaneous non-automotive
applications. Non-automotive revenues have grown by 25%
and 30% on consolidated and stand-alone bases respectively.
This business is expected to maintain it's growth momentum
in the coming years, but in view of the anticipated higher
growth of the automotive industry and the company's strong
relationships with passenger car manufacturers, the share
of non automotive business in the overall business of the
company will continue to be at the same level and will
continue to contribute to the profitability of the company.
Opportunities & Future Prospects
The discussion on Opportunities and Future Prospects has
been adequately covered in the preceding sections.
Shareholder Value
At MSSL, our goal is to become a globaly competitive player
in our chosen line of business.This will enable us to maintain
our profitability and grow on a sustained basis. All our
endevours in future will continue to be guided by the principle
of creating and enhancing shareholder value.
Cautionary Statement
Certain statements made in the Chairman’s Review and Management
Discussions & Analysis Report relating to the company’s objectives,
projections, outlook, expectations, estimates etc. may constitute ‘forward
looking statements’ within the meaning of applicable laws and regulations.
Actual results may differ materially from such expectations, projections
etc. whether express or implied. Several factors could make significant
difference to the company’s operations. These include climatic conditions,
economic conditions affecting demand and supply, government regulations
and taxations, natural calamities etc over which the company does not
have direct control.
15
Our Principal Partner
Sumitomo Wiring Systems, Ltd. Japan
CANADA
U.S.A.
NETHERLANDS
UK
GERMANY
FRANCE
ITALY
SPAIN
PORTUGAL
MEXICO
MOROCCO
SLOVAKIA
POLAND
HUNGARY
ROMANIA
JAPAN
TURKEY
INDIA
CHINA
VIETNAM
PHILIPPINES
THAILAND
MALAYSIA
SINGAPORE
INDONESIA
BRAZIL
AUSTRALIA
Established in
1917,Sumitomo Wiring Systems
(SWS) has the second highest share in wire
harnesses in Japan and the third highest worldwide
share in the market. Over a period of time, SWS has taken
various initiatives to further expand its share of the global
market, climbing from 11% in fiscal 2002 and 12% in fiscal 2003
to an anticipated 15% in fiscal 2005. The company’s
current revenues are Japanese Yen 373 billion with
66 overseas affiliates spread over 28 countries.
SWS provides technical support to MSSL in the form
of resident technical advisors, training of engineers &
production personnel, manufacturing methodologies,
Japanese manufacturing techniques, quality circle
activities, kaizen, collaborative design & development
and global benchmarking. SWS is aiming to realize at global level the
best quality at the most competitive cost, and production in optimum
locations. To achieve this goal, SWS conducts benchmarking
on three levels - company, plant and associates. This
global benchmarking has radically raised the
competitive environment in
all levels.
17
Vision
To be a Globally Preferred Solutions Provider
a Ensure Customer Delight
Mission
18
Values
a Involve Employees as “Partners” in Progress
a Enhance Shareholder Value
a Set new standards in good corporate citizenship
We are building a robust organisation that will help us consistely
deliver superior operating and financial results.
a Be a lean, responsive and learning organisation
a Continuously improve to achieve world-class standards and
total customer satisfaction
a Proactively manage change
a Maintain high standards of integrity and safety
a Ensure a common culture and a common set of values
throughout the organisation
a Recognise individuals’ contribution
a Develop stronger leadership skills, greater teamwork and a
global perspective
a Constantly upgrade the skill levels across the organisation
through knowlege sharing programmes
T O G E T H E R
W E
M A K E
I T
H A P P E N
NOTICE
NOTICE IS HEREBY GIVEN THAT the Eighteenth Annual General Meeting of the members of Motherson Sumi
Systems Limited will be held at FICCI Golden Jubilee Auditorium,Tansen Marg, New Delhi on Saturday the 20th day of August,
2005 at 11.00 a.m. to transact the following business:
AS ORDINARY BUSINESS :
1. To consider and adopt the Audited Balance Sheet as at March 31, 2005 and Profit and Loss Account for the year ended
on that date and the reports of the Directors and Auditors thereon.
2. To consider declaration of dividend by the Company, as recommended by the Board of Directors for the year ended
March 31, 2005.
3. To appoint a Director in place of Mr. M.S. Gujral who retires by rotation and, being eligible, offers himself for reappointment.
4. To appoint a Director in place of Maj. Gen. Amarjit Singh (Retd.) who retires by rotation and, being eligible, offers himself
for re-appointment.
5. To appoint Auditors of the Company to hold office up to the conclusion of next Annual General Meeting and to fix their
remuneration.
AS SPECIAL BUSINESS :
6. To consider and if thought fit to pass with or without modification the following resolution as an Ordinary
Resolution:
“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, read along with Schedule XIII or any other
applicable provisions, if any, of the Companies Act, 1956 approval be and is hereby accorded to the reappointment of
Mr. Pankaj Mital as Manager of the Company designated as Chief Operating Officer for a period till 31.03.07 w.e.f. 29th
Janaury, 2005 on the following terms and conditions :
A. Salary :
Rs. 112,034/- per month w.e.f. 01.01.05 and Rs. 129,400/- per month w.e.f. 01.04.05. Chief Operating Officer shall
also be entitled to Bonus as per the Company’s Rules.
B. Perquisites and Allowances :
Chief Operating Officer shall be entitled to perquisites and allowances like accommodation (furnished or otherwise) or
House Rent Allowance in lieu thereof, medical reimbursement, leave travel concession for self and his family including
dependants, other perquisites and amenities in accordance with the rules of the Company subject to overall ceiling
on remuneration prescribed under Section 198 and 309 read with Schedule XIII and other applicable provisions, if
any, of the Companies Act, 1956.
C. Provident Fund and Superannuation Fund etc.:
• Company’s Contribution to Provident Fund, Superannuation Fund or Annuity Fund to the extent these either
singly or put together are not taxable under the Income Tax Act, 1961.
• Gratuity payable at the rate not exceeding half month salary for each completed year of service.
• Encashment of Leave at the end of tenure will be permitted in accordance with the rules of the Company.
• The Company shall provide a car for the use of Chief Operating Officer.
The above mentioned perquisites will not be included in the computation of the ceiling on remuneration.
D. Minimum Remuneration:
Notwithstanding anything herein, where in any financial year, during the currency of tenure of the Chief Operating
Officer, the Company has no profits or its profits are inadequate in any financial year, the remuneration payable to him
shall be governed by Section II of Part II of Schedule XIII of the Companies Act, 1956 or any statutory modification
thereof.
By Order of the Board
for MOTHERSON SUMI SYSTEMS LIMITED
Sd/Date : May 27, 2005
Place : Noida
V.C. SEHGAL
Chairman
21
NOTES
1.
2.
3.
4.
5.
6.
7.
8.
22
9.
The relative Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of item 6 is annexed
hereto.
A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED
NOT BE THE MEMBER OF THE COMPANY. Proxy must be deposited not later than 48 hours before the
commencement of the meeting.
The Members / Proxies should bring their attendance slip, sent herewith, duly filled in, for attending the meeting.
Register of Members and Share Transfer Books of the Company will remain closed from 16.08.05 to 20.08.05 (both days
inclusive).
The dividend on equity shares, if declared, shall be paid to those members whose names appear in the Register of Members of the Company as on 20.08.05, with respect of shares held in electronic form the dividend will be payable to the
beneficial owners of the shares as on the closing hours of business on 13.08.05 as per details furnished by the Depositories
for this purpose.
Pursuant to the provisions of Section 205A of the Companies Act, 1956, the amount of dividend which remains unclaimed
for a period of 7 years would be transferred to the “Investor Education and Protection Fund (IEPF)”, constituted by the
Central Government and the shareholder(s) would not be able to claim any amount of dividend so transferred to the
Fund.
The proposed date for the transfer of dividend by the Company for the year 1997-1998 to IEPF is 8th September, 2005.
Payment of Dividend through ECS:
Members holding shares in physical form are advised to submit particulars of their bank account, viz., name and address
of the branch of the bank, 9 digit MICR code of the branch, type of account and account number to MCS Limited at
SriVenketash Bhavan, W-40 Okhla Industrial Area Phase – II, New Delhi – 110 020.
Members holding shares in demat form are advised to inform their particulars of their bank account to their respective
depository participant.
The members are requested to:
a) Quote their folio number while corresponding with the Company.
b) Notify any change in their registered address immediately.
EXPLANATORY STATEMENT
Item No. 6
(Pursuant to Section 173(2) of the Companies Act, 1956)
: The Board of Directors of the Company in their meeting held on 27th January, 2005 have approved
the reappointment of Mr. Pankaj Mital as Manager of the company designated as, Chief Operating
Officer of the Company for a period till 31.03.07 and an increase in remuneration payable to
him as mentioned hereunder :
A. Salary :
Rs. 112,034/- per month w.e.f. 01.01.05 and Rs. 129,400/- per month w.e.f. 01.04.05. Chief
Operating Officer shall also be entitled to Bonus as per the Company’s Rules.
B. Perquisites and Allowances :
Chief Operating Officer shall be entitled to perquisites and allowances like accommodation
(furnished or otherwise) or House Rent Allowance in lieu thereof, medical reimbursement,
leave travel concession for self and his family including dependants, other perquisites
and amenities in accordance with the rules of the Company subject to overall ceiling on
remuneration prescribed under Section 198 and 309 read with Schedule XIII and other
applicable provisions, if any, of the Companies Act, 1956.
C. Provident Fund and Superannuation Fund etc.:
• Company’s Contribution to Provident Fund, Superannuation Fund or Annuity Fund to
the extent these either singly or put together are not taxable under the Income Tax Act,
1961.
• Gratuity payable at the rate not exceeding half month salary for each completed year of
service.
• Encashment of Leave at the end of tenure will be permitted in accordance with the rules
of the Company.
• The Company shall provide a car for the use of Chief Operating Officer.
The above mentioned perquisites will not be included in the computation of the ceiling
on remuneration.
D. Minimum Remuneration:
Notwithstanding anything herein, where in any financial year, during the currency of tenure
of the Chief Operating Officer, the Company has no profits or its profits are inadequate in
any financial year, the remuneration payable to him shall be governed by Section II of Part II
of Schedule XIII of the Companies Act, 1956 or any statutory modification thereof.
The terms of remuneration specified above are now being placed before the Members in
General Meeting for their approval.
Mr. Pankaj Mital is a Science Graduate and Post Graduate in Management. He has been
associated with the Company for the last 15 years and the Company has benefited immensely
from his wide and varied experience. Mr. Pankaj Mital is a director of other Companies as
mentioned hereunder :
• Schefenacker Motherson Limited
• Saks Ancillaries Limited
• Motherson Engineering Research & Integrated Technologies Limited
• Motherson Innovative Technologies & Research
• MSSL Ireland Pvt. Ltd.
• MSSL Mideast (FZE)
23
Committee Memberships of other Companies:
•
Schefenacker Motherson Limited - Audit Committee
Mr. Pankaj Mital may be deemed to be interested in the resolution.
The resolution approving the reappointment and an increase in remuneration payable to
Mr. Pankaj Mital shall be open to the inspection of any member of the Company at the
Registered Office of the Company during public hours on any working day of the Company.
Your Directors recommend the passing of the resolution.
Except Mr. Pankaj Mital none of the Director is interested in the resolution.
By Order of the Board
for MOTHERSON SUMI SYSTEMS LIMITED
Date : May 27, 2005
Place : Noida
24
Sd/V.C. SEHGAL
Chairman
DIRECTORS’ REPORT
To the Members,
Your Directors have pleasure in presenting Eighteenth Annual Report together with the audited accounts. Key financial
figures on the profitability for the year ended 31st March, 2005 are as follows:
FINANCIAL PERFORMANCE
(Rs. in Millions)
Gross Sales
Net Sales
Gross Profit before Depreciation, Interest & Tax
Less: Depreciation
Less: Interest
Profit before tax
Less: Provision for Taxation
Profit after Tax
Add: Balance brought forward
Net Profit available for appropriation
For the year ended
March 31, 2005
For the year ended
March 31, 2004
6,368.70
5535.51
1133.77
264.22
19.57
849.98
229.04
620.94
596.77
1,217.71
5,218.77
4,571.69
982.86
268.67
33.16
681.03
196.52
484.51
388.92
873.43
March 31, 2005
March 31, 2004
234.89
32.94
150.00
799.88
156.59
20.06
100.00
596.77
Appropriations :
Proposed Dividend
Tax on Dividend
Transfer to General Reserve
Balance carried to Balance Sheet
PERFORMANCE OF OPERATIONS
The Company recorded a turnover of Rs. 5,535.51 millions as against Rs. 4,571.69 millions during the year 2004-2005 and
Profit After Tax of Rs. 620.94 millions as against Rs. 484.51 millions during the previous year. The company’s performance
is discussed at length in Management Discussion and Analysis, which forms part of the Directors report.
DIVIDEND
Your Directors have recommended a dividend of Re. 1.00 per share for the year ended 31.03.05.The dividend, on approval
by shareholders, will be paid to those shareholders whose names appear in the register of members as on 20.8.2005 The
total cash outgo on account of proposed dividend (inclusive of tax on dividend) is Rs. 234.89 millions (Previous Year Rs.
176.65 millions) which represents 43% of the Profit After Tax.
BONUS SHARES
During the year under review, the company has issued bonus shares in the proportion of one share against two shares
held.
CONSOLIDATED FINANCIAL STAEMENTS
In accordance with the Accounting Standard AS -21 on Consolidated Financial Statements read with Accounting Standard
AS – 23 on Accounting for Investments in Associates and AS –27 on Financial Reporting of Interests in Joint Venture in
Consolidated Financial Statements, your Directors have pleasure in attaching the Consolidated Financial Statements which
form part of the Annual Report. The summary of consolidated results is as follows :
25
(Rs. in Millions)
Gross sales
Net Sales
Profit before Interest, depreciation
Share of Profit in Associate
Profit before Tax
Provision for Tax
Profit after Tax
Minority Interest
Profit after Tax and Minority Interest
For the year ended
March 31, 2005
For the year ended
March 31, 2004
8827.25
7812.25
1501.70
3.52
1,130.54
272.25
858.29
18.32
839.97
6,681.88
5,899.35
1,203.91
2.54
857.50
208.48
649.02
(3.36)
652.38
The performance of the Company on consolidated basis is discussed at length in Management Discussion & Analysis.
FINANCE
The Company continues to enjoy “A1+” rating by ICRA for its Commercial Paper/ Short Term Debt programme of Rs.
500 million (previous year Rs. 350 million).
POST BALANCE SHEET DEVELOPMENTS
26
The company has signed Technical Assistance Agreement with DAS Draxlmaier Automotivsysteme Gmbh, Germany for
providing technical know how to the company for manufacture of wiring harnesses for Daimler Chrysler India Limited.The
company has also purchased the entire equity and preference shares ( 26% ) held by Lisa Draexlmaier in Draexlmaier &
Motherson Electrical Systems India Limited (DMSIL), consequently, DMSIL has become 100% subsidiary of the company.
At the Board Meeting held on 27.5.2005, the Board decided to merge DMSIL into the company (subject to necessary
approvals),which will give operating advantages to both the companies.
The Company’s subsidiary, MSSL Gmbh has incorporated subsidiary Mothersonsumi Reiner Gmbh ,which has purchased
the running business from Reiner Gmbh, Germany. Reiner Gmbh was engaged in the manufacture of machined precision
parts and the annual turnover of the company was Euro 6 million.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING
AND OUTGO
Particulars required to be disclosed under the Companies (Disclosure of Particulars in the Report of Board of Directors)
Rules, 1988 are annexed hereto in Annexure ‘A’.
PARTICULARS OF EMPLOYEES
As required by the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of
Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure B to the Directors’
Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis is enclosed and forms part of the Director’s Report.
EXPORTS
The company’s exports have grown from Rs. 948 millions in 2003-04 to Rs. 1,057 millions in 2004-05. On consolidated
basis, the exports have grown by 47% from Rs. 1,515 millions in 2003-04 to Rs. 2,230 millions in 2004-05.The company has
set up representative office in Germany to explore further possibilities of exports in that region. The company’s exports
efforts and strategies are discussed at length in Management Discussion & Analysis.
SUBSIDIARIES / JOINT VENTURES
The Company has the following 100% subsidiaries viz. MSSL Mideast (FZE), MSSL Mauritius Holding Limited, MSSL Handles
(GmbH), Motherson Electrical Wires Lanka Pvt. Ltd., MSSL Hag Toolings Ltd. (FZC) (through MSSL Mauritius), and MSSL
Ireland Pvt Limited (through MSSL Mauritius), MSSL(S) Pte Ltd., MSSL (GB) Ltd.(subsidiary of MSSL Mideast), joint ventures
subsidiaries viz. Draexlmaier Motherson Electrical Systems India Ltd., WOCO Motherson Elastomer Limited and WOCO
Motherson Advanced Rubber Technologies Limited and Motherson PUDENZ WICKMANN Ltd. As per Section 212 of
the Companies Act, 1956, your Company is required to attach the directors report, balance sheet and profit and loss
account of these subsidiaries.The Company applied to the Central Government for an exemption from such attachment
as it presents the audited consolidated accounts of the Company and its subsidiaries in its annual report. The Central
Government has granted exemption with respect to the above mentioned subsidiaries. The accounts of MSSL Gmbh,
subsidiary of MSSL Mideast (FZE) which is also subsidiary of your company are enclosed.
The annual accounts of the subsidiary companies, along with related information shall be available for inspection at the
registered office of the Company and that of the subsidiary company during working hours on any working day.
Any shareholder of the Company / its subsidiaries interested in obtaining the annual accounts of the subsidiaries may
write to the Secretary at the Registered Office of the Company.
The performance of the subsidiaries and joint ventures are discussed at length in Management Discussion and Analysis.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors confirm :
a)
That in the preparation of the annual accounts, the applicable accounting standards have been followed and that no
material departure have been made for the same;
b) That they have selected such accounting policies and applied them consistently and made judgments and estimates
that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end
of the financial year and of the profit or loss of the Company for that period;
c)
That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
d) That they have prepared the annual accounts on a going concern basis.
DIRECTORS
Mr. M.S. Gujral and Maj. Gen. Amarjit Singh (Retd.) retire by rotation and being eligible, offer themselves for reappointment
at the ensuing Annual General Meeting.
CORPORATE GOVERNANCE
A separate section on Corporate Governance forming part of the Director’s Report and the certificate from the company’s
auditors confirming compliance of conditions on Corporate Governance as stipulated in Clause 49 of the Listing Agreement
is included in the Annual Report.
AUDITORS
M/s. PriceWaterhouse, Chartered Accountants, retire at the ensuing Annual General Meeting and, being eligible, offer
themselves for re-appointment. The Company has received a certificate from them pursuant to Section 224(1B) of the
Companies Act 1956, confirming their eligibility for re-appointment.
FIXED DEPOSITS
The Company has neither invited nor accepted any deposits from the public during the year. There is no unclaimed or
unpaid deposit lying with the Company.
27
LISTING
The shares of your Company are listed at Delhi Stock Exchange, Mumbai Stock Exchange, Ahemdabad Stock Exchange
and National Stock Exchange. The listing fees for the year 2005-2006 have been paid well before the due date i.e.
30th April, 2005.
ACKNOWLEDGEMENT
Your Board of Directors would like to place on record their sincere appreciation for the whole hearted support and
contributions made by all the employees of the Company, as well as, Customers, Suppliers, Bankers, Governments of
Delhi, Haryana, Uttar Pradesh, Maharashtra, Tamilnadu and Karnataka towards the conduct of the efficient operations of
your Company. Last but not the least the Board of Directors wish to thank the shareholders of the Company and the
Collaborators Sumitomo Wiring Systems Limited and Sojitz Corporation, Japan for their unstinted support.
for and on behalf of the Board
for MOTHERSON SUMI SYSTEMS LIMITED
Date : May 27, 2005
Place : Noida
28
V.C. SEHGAL
Chairman
ANNEXURE ‘A’
PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURES OF PARTICULARS
IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988
A. CONSERVATION OF ENERGY
The Company took various steps for energy conservation during the year :
I.
Optimized the lux levels by reducing the number of lights in non productive areas like staircases, walkways and rest
areas, based on the energy audit findings.
II. Usage of occupancy sensors in the meeting rooms to switch off the lights when not in use.
III. The power factor is being monitored and controlled on daily basis.
IV. Auto switching off of the lights and fans on the shop floors during tea and lunch breaks.
V. Auto switching of water pumps through water level controllers on the water tanks.
VI. Redistribution of the generators and Air Compressors across the manufacturing units to optimize their usage and
get better Standard Fuel Consumption.
B. TECHNOLOGY ABSORPTION
FORM ‘B’
Form for disclosure of particulars with respect to:
RESEARCH AND DEVELOPMENT
Specific area in which R& D carried out by the Company:
The Company has been continuously working towards enhancing its research & development capabilities. The company
has been keeping pace with the technological advances by implementation of state of art integrated software for designing
wiring harnesses.
The Company has worked very hard to meet the customer requirements by developing and providing the products,
which are free of lead, chromium (hexavalent), mercury, asbestos and other non-eco friendly materials.
The Company has also introduced new range of latest technology components in the wiring harnesses thereby enhancing
expected reliability and life of the electrical systems.
The Company has also introduced new processes of joining the wires using resistance welding technique, which again has
enhanced the reliability of whole electrical distribution system in the automobile.
The Company has successfully launched the new range of harness for office automation and medical equipments and
hence replaced the import of these harness with locally developed product.
Benefits derived as a result of above R&D
The benefits derived as a result of above research and development programmes are:
Standardization of products and process across all the manufacturing locations resulting in increased products reliability
and manufacturing flexibility.
Centralized databank for ready access to wide product information, thereby enabling faster product development.
Future plan of actions:
29
All the products being developed/designed will be integrated with Capital H/IHS wiring harness softwares.These softwares
integrate with the global wiring harness design/development standards/technology.
Expenditure on R&D for the year ended March 31, 2005
The company incurred revenue expenditure of Rs 9.42 millions (0.17% of the sales) and NIL capital expenditure during
the year 2004-05.
TECHNOLOGY ABSORPTION , ADAPTATION AND INNOVATION
The Company has made major efforts to enhance the technological base of its operations during the year.The Company
has been absorbing technology sourced from Sumitomo Wiring Systems, Japan, on an on going basis.
The Company has successfully developed and implemented the latest manufacturing technologies in the field of wiring
harnesses. This year the company has successfully introduced the waterproofing of splice joints, Compact Point Guide
Testers, Pressure / Vacuum test of sealed connectors, multiple board indexing conveyors and new associate training
equipments etc. These technologies have given a substantial boost to the productivity and quality of the product.
1. Activities relating to export, incentives to increase exports & developments of new export
markets.
The company has continued to maintain focus and avail of export opportunities based on economic consideration.
30
The company has set up offices in Europe who regularly collect the information from the potential customers. The
company has recently set up a representative office in Germany.The company has set up additional facilities in EOU’s
by adding new location to service its customers. During the year, the company has done exports (FOB value) worth
Rs. 1,032 millions.
2.
Total foreign exchange used and earned
(Rs. in Millions)
Foreign exchange earned
Rs 1,040.35
Foreign exchange used
Rs 1,498.47
Mr. A Yamauchi
Mr. Sanjeev Ahuja *
Mr. Sumeet Chopra *
Mr. Sukant Gupta
Mr. Jayant Khemani
Mr. Deepak Tyagi
Mr. J.S Bindra
Mr. Paul Breen *
Mr. Saurabh Tyagi *
Mr. Yoshitaka Ando
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
42
32
41
45
39
38
33
33
44
49
Age
(Years)
Graduate in Economics
MBA
Engineer
BCOM,DBM
B.TECH ELEC
PGD PLAS.PROC.
TECH
MBA
MBA
MMS, M.SC
Graduate in Commerce
Qualification
18
9.5
23
20.5
16
17
13
9
20.5
21
Experience
(Years)
16-Aug-01
1-Dec-04
1-Dec-04
15-Oct-84
20-Dec-89
1-Jun-99
15-Mar-97
1-Sep-01
8-May-89
18-Jan-01
Date of
Employment
3.189
1.657
1.948
4.678
3.383
3.015
2.449
1.312
1.015
2.714
Chief Representative
Manager
General Manager
Mgr. Europe Operation
General Manager
General Manager
Chief Techncial Officer
Manager
Dy General Manager
Remuneration
(Rs. in million)
Whole time Director
Designation
On deputation from
Sumitomo Wiring
Systems, Japan
Patel Roadways
Draexlmaier &
Motherson Electrical
Systems India Ltd.
-
-
M/s A.G Industries
Parry Engg. &
Export Ltd.
Duratech
Solutions Pvt. Ltd.
Hindustan Silk Mills
On deputation from
Sumitomo Wiring
Systems, Japan
Particulars of
last Employment
Notes :
1. Employment in the Company is non-contractual,except in case of Mr Paul Breen.
2. Designation denotes the nature of duties also.
3. Remuneration includes salary,allowances & value of perquisities.
4. The employee mentioned above doesn’t holds (by himself or along with his spouse & dependent children ) more than two percent of equity shares of the Company
5. The employee mentioned above is not related to any of the Directors of the Company.
6. Asterisk against a name indicates that the employee was in service only for a part of the year
Name of the
Employee
Sl.
No.
Manager
Sales Executive
Operations
Incharge
-
-
Manager
Production
Market Leader
CEO
Mktg. Manager
Manager of
International
Business
Last
Designation
INFORMATION AS PER SECTION 217 (2A) OF COMPANIES ACT, 1956 , READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES ) RULES, 1975
AND FORMING PART OF THE DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED MARCH 31, 2005
ANNEXURE “B”
31
REPORT ON CORPORATE GOVERNANCE
The Directors present the Company’s Report on Corporate Governance.
Company’s Philosophy on Corporate Governance
At MSSL, we are committed to the key elements of Corporate Governance- transparency, disclosure and independent supervision
to ensure that all functions of the Company are discharged in a professionally sound, competent and transparent manner.
Board of Directors
The Board presently consists of a majority of non-executive/ independent directors, who are eminent professionals with
experience in business/finance/public enterprises.
Name of the Director
Mr. V. C. Sehgal
Mr. Toshimi Shirakawa
Mr. R. Ganapati
Mr. M. S. Gujral
Mr. Hiroto Murai
Maj. Gen. Amarjit Singh (Retd.)
Mr. Bimal Dhar
Mr. A. Yamauchi
Mr. Masahiro Matsushita
(Alt. Director to Mr. Hiroto Murai)
Mr. Pankaj Mital
32
(Alt. Director to Mr. Bimal Dhar)
Executive/NonExecutive/Independent
Other
Committee
Committee
DirectorshipsMemberships Chairmanships
held*
Non-Executive Chairman
Non-Executive Director
Independent Director
Independent Director
Non-Executive Director
Independent Director
Non Executive Director
Executive/Whole-time Director
14
2
1
4
2
2
6
3
4
1
2
6
NIL
2
2
2
1
NIL
1
3
NIL
NIL
NIL
NIL
Non-Executive Director
1
NIL
NIL
Executive/ Chief Operating Officer
3
1
1
*Excluding private and foreign companies
Attendance at Board Meetings and Annual General Meeting
The Board of Directors of the Company meets atleast once a quarter to review the quarterly results and other items on the
agenda, and also at the time of the Annual General Meeting of the Company. The Board of Directors of the Company met
ten times during the last financial year:
(i) 23rd April, 2004 (ii) 28th May, 2004 (iii) 22nd July, 2004 (iv) 18th September, 2004 (v) 28th October, 2004 (vi) 22nd November,
2004 (vii) 7th January, 2005 (viii) 27th January, 2005 (ix) 3rd March, 2005 (x) 31st March, 2005.
The Company placed before the Board the annual operating plans, performance of various units/ divisions and all statutory
and other significant information to enable it to discharge its responsibilities of strategic supervision of the company and as
trustees of stakeholders.
Name of the Director
No. of Board Meetings Attended
Mr. V. C. Sehgal
Mr. Toshimi Shirakawa
Mr. R. Ganapati
Mr. M. S. Gujral
Mr. Hiroto Murai
Maj. Gen. Amarjit Singh (Retd.)
Mr. Bimal Dhar
Mr. A. Yamauchi
Mr. Masahiro Matsushita
(Alt. Director to Mr. Hiroto Murai)
Mr. Pankaj Mital
(Alt. Director to Mr. Bimal Dhar)
Attendance at last AGM
8
2
4
9
3
10
6
10
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
7
Yes
8
Yes
Remuneration of Directors
Details of the payments made to the directors for the year ended March 31, 2005 are as follows
:
Name of the Director
Gross Remuneration
(Rs.)
Sitting Fee*
(Rs.)
Total
(Rs.)
32,09,911.00
21,87,187.00
1,20,000.00
60,000.00
55,000.00
-
1,20,000.00
60,000.00
55,000.00
32,09,911.00
21,87,187.00
Mr. R. Ganapati
Mr. M. S. Gujral
Maj. Gen. Amarjit Singh (Retd.)
Mr. A. Yamauchi
Mr. Pankaj Mital
*Includes sitting fees paid for Committee Meetings
Audit Committee
The members of Audit Committee met thrice during the financial year 2004 - 2005 and the Committee reviewed the half-yearly
and annual financial statements before submission to the Board. The dates on which the meetings were held are as follows :
(i) 28th May, 2004 (ii) 18th November, 2004 (iii) 3rd March, 2005
The Audit Committee of the Company comprises of majority of independent directors and the composition and attendance
of each member of the Committee is given below :
Name
Designation
Non executive/Independent Committee Meetings Attended
Mr. R. Ganapati*
Mr. Toshimi Shirakawa
Mr. M.S. Gujral**
Maj. Gen. Amarjit Singh
(Retd.)***
Member
Member
Chairman
Member
Independent/ Non Executive
Non Executive
Independent/ Non Executive
Independent/ Non Executive
2
NIL
3
1
*
Mr. R. Ganapati was a Chairman till 27.01.05.
**
Mr. M.S. Gujral became the Chairman of the Audit Committee w.e.f. 27.01.05
***
Maj. Gen. Amarjit Singh (Retd.) became a member w.e.f. 27.01.05
The term of reference of the Audit Committee includes the following:
a) To hold periodic discussions with the Statutory Auditors and Internal Auditors of the Company concerning the accounts
of the Company, internal control systems, scope of audit and observations of the Auditors/ Internal Auditors.
b) To review compliance with internal control systems.
c) To review the half-yearly and annual financial results of the Company before submission to the Board.
d) To investigate into any matter in relation to items specified in section 292A of the Companies Act, 1956 or as may be
referred to it by the Board and for this purpose to seek any relevant information contained in the records of the Company
and also seek professional advice, if necessary.
e) To review the Company’s financial and risk management policies.
f) To investigate into any matter in relation to items specified in section 292A of the Companies Act, 1956 or as may be
referred to it by the Board and for this purpose to seek any relevant information contained in the records of the Company
and also seek professional advice, if necessary.
g) To review the Company’s financial and risk management policies.
Investors Grievance Committee
The Company has an Investors Grievance Committee which looks into shareholders and investors’ grievances. The following
are the members of the Committee:
Name
Designation
Mr. R. Ganapati
Mr. M.S. Gujral
Mr. A. Yamauchi
Chairman
Member
Member
Mr. G.N. Gauba, the Company Secretary, is the Compliance Officer.
Executive/Non-executive/Independent
Independent/Non-executive
Independent/Non-executive
Executive
33
Share Transfers
l All shares have been transferred and returned in about 20 days from the date of receipt, so long as the documents have
been clear in all respects.
l The Share Transfer Committee meets normally once in a fortnight.
l Total number of shares transferred during the year 2004 - 2005 was 138,484 compared to 35,548 during 2003 - 2004.
l As on 31st March, 2005, there are NIL equity shares pending for transfer.
Investor Relations
46 complaints relating to the non-receipt of shares after transfer, non-receipt of dividend etc. were received.
Complaints received during the year have been cleared within the financial year except in cases that are constrained by
disputes.
The complaints are generally replied within 10 days from their lodgment with the Company.
Particulars of the Past three AGMs
AGM
Date
15th 05.09.02 11.00 A.M.
16th 17.09.03 10.30 A.M.
17th 18.09.04 11.00 A.M.
34
TimeVenue
Shah Auditorium, Delhi
Shah Auditorium, Delhi
FICCI Golden Jubilee
Auditorium, New Delhi
No. of Special Resolutions passed
2
1
NIL
Postal Ballot
The Company had sought the approval of the shareholders for creation of charges, mortgages, hypothecations on the movable
and immoveable properties of the Company to secure the facilities sanctioned to the Company and/ or its subsidiaries.
Note on Director’s reappointment
a. Mr. M.S. Gujral aged about 81 years, is a Retd. Senior Government Officer, and has held the position(s) of Chairman - Coal
India Ltd., Advisor - Planning Commission, Member - Public Enterprises Selection Board and Chairman - Railway Board.
Mr. M.S. Gujral is on the Board of Directors since December, 1992.
He is on the Board/ Committee’s of the following companies namely :
1) Monnet Ispat Limited
2) Monnet Sugar Limited
3) BESCO Limited
4) MothersonSumi INfotech & Designs Limited
Committee Memberships - Audit Committee
1) Monnet Ispat Limited
2) BESCO Limited
3) MothersonSumi INfotech & Designs Limited - Chairman
b.
Maj. Gen. Amarjit Singh (Retd.), is a mechanical engineer and a post graduate in Business Management. He joined MSSL’s
Board after 7 years with the Group, handling a senior Corporate Management function.
Earlier after his retirement from the Indian Army, where he was awarded the Vishishta Seva Medal (VSM) for his distinguished
services, he worked as CEO of an auto electrical company in Northern India for five years.
He is on the Board of the following Companies:
1) MothersonSumi INfotech & Designs Limited
2) Sumi Motherson Innovative Engineering Limited
Committee Memberships- Audit Committee
1) Sumi Motherson Innovative Engineering Limited
Mr. M.S. Gujral and Maj. Gen. Amarjit Singh (Retd.), Directors of the Company are retiring by rotation at the ensuing Annual
General Meeting and are eligible for re-appointment.
Particulars of loans/ advances and investment in its own shares by listed companies,
their subsidiaries, associates, etc., required to be disclosed in the annual
accounts of the Company pursuant to Clause 32 of the Listing Agreement
(Rs. in Millions)
Name of the Company
MSSL Mauritius Holdings Ltd.
MSSL Ireland Private Ltd.*
MSSL Hag Toolings Ltd.*
MSSL Handels GmbH
Hag Kunststofftechnik GmbH**
Status
Nature
Balance as on
31st March, 2005
Maximum outstanding
during the year
100% Subsidiary
100% Subsidiary
53.33% Subsidiary
100% Subsidiary
Related Party
Loan
Loan
Loan
Loan
Loan
15
43
3
56
15
6
43
3
73
* Through MSSL Mauritius Holdings Ltd.
** Through MSSL Mideast (FZE)
Disclosures
l
l
l
No transaction of material nature has been entered into by the Company with Directors or Management and their
relatives, etc. that may have a potential conflict with the interests of the Company.
Transactions with the related parties are disclosed in Note no. B (20) on Schedule XII to the Accounts in the Annual
Report.
No penalties or strictures were imposed by SEBI or the Stock Exchanges.
Means of Communication
l
l
The annual, half-yearly and quarterly results are regularly posted by the Company on its website www.motherson.com.
These are also submitted to the Stock Exchanges in accordance with the Listing Agreement and published in leading
newspapers like Economic Times.
Management Discussion & Analysis forms part of this Annual Report.
Shareholders’ Information
1. Annual General Meeting
Date and Time
Venue
:
:
20th August, 2005 at 11.00 a.m.
FICCI Golden Jubilee Auditorium,
Tansen Marg, New Delhi.
2. Financial Calendar (tentative and subject to change)
Annual General Meeting for the year ending March 31, 2005
Financial reporting for the first quarter ending June 30, 2005
Financial reporting for the second quarter ending September 30, 2005
Financial reporting for the third quarter ending December 31, 2005
Financial results for the year ending March 31, 2006
:
:
:
:
:
20th August, 2005
July, 2005
October, 2005
January, 2006
May, 2006
3. Book Closure Date
:
16th August, 2005 to
20th August, 2005
4. Dividend payment
:
Re 1/- per share, to those shareholders who
are holding shares in physical form, whose
name appears on the Register of members
on 20.08.05. With respect to shares held in
35
electronic form the dividend shall be payable
to beneficial owners of the shares as on the
closing hours of business on 13.08.05 as per
details furnished by the Depositories for the
purpose.
5. Listing on Stock Exchanges at
:
The National Stock Exchange of India Ltd.
Exchange Plaza, 5th Floor
Plot no. C/1, G Block
Bandra - Kurla Complex
Bandra (E), Mumbai
Code : MOTHERSUMI
The Stock Exchange, Mumbai
Phiroze Jeejeebhoy Towers
Dalal Street, Mumbai
Code : 517334
Delhi Stock Exchange Association Limited
DSE House, 3/1, Asaf Ali Road
New Delhi
Ahmedabad Stock Exchange
Kamdhenu Complex, Near Polytechnic
Panjara Pole, Ahmedabad
6. Market Price Data*
36
Month
Apr – 2004
May – 2004
June – 2004
July – 2004
Aug – 2004
Sep – 2004
Oct – 2004
Nov – 2004
Dec – 2004
Jan – 2005
Feb – 2005
Mar – 2005
The Stock Exchange, Mumbai
National Stock Exchange of India
High
Low
High
Low
36.27
31.40
30.80
32.97
41.33
51.33
56.00
65.67
69.40
80.00
74.67
73.50
30.17
22.23
19.83
26.27
29.67
40.50
46.00
52.67
53.53
58.00
64.50
51.35
37.23
32.00
31.03
33.27
41.00
51.27
55.97
66.67
69.50
76.53
72.60
72.50
30.20
22.47
22.00
26.33
29.83
41.27
45.67
52.80
54.17
58.07
64.05
52.00
*During the year the Company has issued Bonus Shares in the ratio of 1:2, the equity shares of the Company became
ex–bonus w.e.f. 24.02.05. The previous month prices of equity shares have been recasted accordingly.
7. Performance in comparison to Broad Based Indices
8. Shareholding Pattern of the Company as on 31.03.05
Category
No. of Shares Held
Indian Promoters
Foreign Promoters
Institutional Investors
Private Corporate Bodies
Indian Public
NRIs/ OCBs
% of Shareholding
86901052
81506250
9814839
19134426
33624592
3908041
37.00
34.70
4.18
8.15
14.31
1.66
9. Registrar and Transfer Agents
MCS Limited
Sri Venketash Bhawan
W – 40, Okhla Industrial Area, Phase - II
New Delhi
10. Share Transfer System
To expedite the share transfer process in the physical segment, authority has been delegated to the Share Transfer
Committee which comprises of:
Mr. V.C. Sehgal
Mr. R. Ganapati
Mr. A. Yamauchi
Mr. Pankaj Mital
Share transfer/ transmissions approved by the Committee are placed at the Board Meeting from time to time.
11. Distribution of shareholding as on March 31, 2005
Share Holding of
Nominal Value of Rs.
No. of
shareholders
% of shareholders
to total
1
- 5000
5001 - 10000
10001 - 20000
20001 - 30000
30001 - 40000
40001 - 50000
50001 - 100000
100001 and above
TOTAL
16297
259
134
41
25
6
35
55
16852
96.71
1.54
0.80
0.24
0.15
0.04
0.21
0.33
100
No. of
shares
% of shares
to total
10771109
1835064
1857368
1006732
873161
266676
2484901
215794189
234889200
4.59
0.78
0.79
0.43
0.37
0.11
1.06
91.87
100
The bonus shares were allotted in the ratio of 1:2 to the shareholders on 3rd March, 2005 while the same were credited to the
beneficiary accounts on 6th April, 2005.
12. Dematerialisation of shares and liquidity
Your company’s shares are tradable compulsorily in electronic form and your company has established connectivity
with both the Depositories i.e. NSDL and CDSL. The members are requested to dematerialize their physical holding
in view of various advantages in Dematerialized form.
Demat ISIN Number in NSDL & CDSL for equity shares: ISIN No. INE775A01035
13. Plant Locations
Noida (Uttar Pradesh)
New Delhi
Gurgaon (Haryana)
Pune (Maharashtra)
Bangalore (Karnataka)
Chennai (Tamilnadu)
Pondicherry
37
Representative Office(s)
Austria
Sharjah
Germany
14. Investors’ correspondence may be addressed to :
Mr. G.N. Gauba
Company Secretary & V.P. Finance
3rd Floor, Bhageria House
43, Community Centre
New Friends Colony
New Delhi - 110 065
Email : [email protected]
[email protected]
AUDITORS’ CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF
CORPORATE GOVERNANCE UNDER CLAUSE 49 OF THE LISTING
AGREEMENT(S)
38
To the Members of
Motherson Sumi Systems Limited
1.
We have reviewed the implementation of Corporate Governance procedures by Motherson Sumi Systems Limited
(the Company) during the year ended March 31, 2005, with the relevant records and documents maintained by the
Company, furnished to us for our review and the report on Corporate Governance as approved by the Board of
Directors.
2.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was
limited to review of procedures and implementation thereof, adopted by the Company for ensuring the compliance of
the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements
of the Company.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the
efficiency or effectiveness with which the management has conducted the affairs of the Company.
3.
On the basis of our review and according to the information and explanations provided to us, the conditions of Corporate
Governance as stipulated in Clause 49 of the listing agreements with the Stock exchanges have been complied with in
all material respect by the Company and that no investor grievances are pending for a period exceeding one month
against the Company as per the records maintained by the Investors Grievances Committee.
Place: New Delhi
Dated: May 27, 2005
KAUSHIK DUTTA
Partner
Membership No. F 88540
For and on behalf of
PRICE WATERHOUSE
Chartered Accountants
AUDITORS’ REPORT
To the Members of
MOTHERSON SUMI SYSTEMS LIMITED
1.
We have audited the attached Balance Sheet of Motherson Sumi Systems Limited, as at March 31, 2005, and the related
Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have
signed under reference to this report. These financial statements are the responsibility of the company’s management.
Our responsibility is to express an opinion on these financial statements based on our audit.
2.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3.
As required by the Companies (Auditor’s Report) Order, 2003, as amended by the Companies (Auditor’s Report)
(Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of
‘The Companies Act, 1956’ of India (the ‘Act’) and on the basis of such checks of the books and records of the company
as we considered appropriate and according to the information and explanations given to us, we further report that:
(i) (a) The company is maintaining proper records showing full particulars including quantitative details and situation
of fixed assets.
(b) The fixed assets are physically verified by the management according to a phased programme designed to
cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of
the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year and no material discrepancies between the book records
and the physical inventory have been noticed.
(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets
has not been disposed of by the company during the year.
(ii) (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the
year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our
opinion, the frequency of verification is reasonable.
(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable
and adequate in relation to the size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper
records of inventory.The discrepancies noticed on physical verification of inventory as compared to book records
were not material.
(iii) (a) The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered
in the register maintained under Section 301 of the Act.
(b) The company has not taken any loans, secured or unsecured, from companies, firms or other parties covered
in the register maintained under Section 301 of the Act.
(iv) In our opinion and according to the information and explanations given to us, having regard to the explanation
that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining
comparative quotations, there is an adequate internal control system commensurate with the size of the company
and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further,
on the basis of our examination of the books and records of the company, and according to the information and
39
explanations given to us, we have neither come across nor have been informed of any continuing failure to correct
major weaknesses in the aforesaid internal control system.
(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or
arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained
under that section.
(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance
of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during
the year, have been made at prices which are reasonable having regard to the prevailing market prices at the
relevant time.
(vi) The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the
Act and the rules framed there under.
(vii) In our opinion, the company has an internal audit system commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant
to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under
clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a detailed examination of the records
with a view to determine whether they are accurate or complete.
40
(ix) (a) According to the information and explanations given to us and the records of the company examined by us, in
our opinion, the company is regular in depositing undisputed statutory dues including provident fund, investor
education and protection fund, employees’ state insurance, income-tax, sales tax, wealth tax, service tax, customs
duty, excise duty and other material statutory dues as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the company examined by us,
there are no dues in respect of income-tax, wealth tax, service tax, customs duty, and cess as at March 31, 2005
which have not been deposited on account of a dispute. The particulars of dues of sales tax and excise duty
which have not been deposited on account of a dispute are as follows Name of the Nature of dues Amount
statute
(Rs.)
Period to which
Forum where the
the amount relates dispute is pending
Central Excise
Act, 1944
Excise duty
and penalty
829,708
2003-2004
Commissioner of Central
Excise (Appeals), Chennai
Central Excise
Act, 1944
Service tax
311,367
1999-2000 and
2000-2001
Commissioner of Central
Excise (Appeals), Chennai
Central Excise
Act, 1944
Excise duty
and penalty
3,830,600
2001-2002
Commissioner of Central
Excise (Appeals), Pune
(x) The company has no accumulated losses as at March 31, 2005 and it has not incurred any cash losses in the financial
year ended on that date or in the immediately preceding financial year.
(xi) According to the records of the company examined by us and the information and explanation given to us, the
company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the
balance sheet date.
(xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures
and other securities.
(xiii) The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/societies are not applicable
to the company.
(xiv) In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.
(xv) In our opinion and according to the information and explanations given to us, the terms and conditions of the
guarantees given by the company, for loans taken by others from banks or financial institutions during the year, are
not prejudicial to the interest of the company.
(xvi) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have
been applied for the purposes for which they were obtained.
(xvii) On the basis of an overall examination of the balance sheet of the company, in our opinion and according to the
information and explanations given to us, there are no funds raised on a short-term basis which have been used for
long-term investment.
(xviii) The company has not made any preferential allotment of shares to parties and companies covered in the register
maintained under Section 301 of the Act during the year.
(xix) The company has issued debentures that are privately placed and are outstanding at the year end against which the
company is not required to create any security or charge.
(xx) The company has not raised any money by public issues during the year.
(xxi) During the course of our examination of the books and records of the company, carried out in accordance with the
generally accepted auditing practices in India, and according to the information and explanations given to us, we have
neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we
been informed of such case by the management.
4.
Further to our comments in paragraph 3 above, we report that:
(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary
for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the company so far as appears from
our examination of those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement
with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply
with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the directors, as on March 31, 2005 and taken on record by
the Board of Directors, none of the directors is disqualified as on March 31, 2005 from being appointed as a director
in terms of clause (g) of sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial
statements together with the notes thereon and attached thereto give in the prescribed manner the information
required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in
India:
(i)
in the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2005;
(ii)
in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(iii)
in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Place: Noida
Date : May 27, 2005
KAUSHIK DUTTA
Partner
Membership Number: F 88540
For and on behalf of
Price Waterhouse
Chartered Accountants
41
BALANCE SHEET AS AT MARCH 31, 2005
(Figures in Rs. thousands)
Schedule
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital
Reserves & Surplus
I
II
Loan Funds
Secured Loans
Unsecured Loans
Deferred tax liability (net)
(Refer A (10) & B (17) on Schedule XII)
TOTAL
42
III
IV
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Capital Work in Progress
V
Investments
VI
Current Assets, Loans and Advances
Inventories
Sundry Debtors
Cash & Bank Balances
Loans & Advances
VII
Less: Current Liabilities and Provisions
Current Liabilities
Provisions
VIII
NET CURRENT ASSETS
TOTAL
Significant Accounting Policies and
Notes forming part of the Accounts
This is the Balance Sheet referred to
in our report of even date
KAUSHIK DUTTA
Partner
M. No.: F 88540
For and on behalf of Price Waterhouse
Chartered Accountants
Place: Noida
Date : May 27, 2005
As at
March 31, 2005
As at
March 31, 2004
234,889
1,506,073
156,593
1,231,257
1,740,962
1,387,850
496,181
206,290
120,465
551,398
108,540
129,047
2,563,898
2,176,835
3,158,476
1,188,525
1,969,951
99,411
2,069,362
159,354
2,597,436
1,057,661
1,539,775
4,817
1,544,592
145,027
632,182
569,373
26,544
372,480
1,600,579
470,832
522,397
39,258
302,575
1,335,062
891,235
374,162
1,265,397
622,892
224,954
847,846
335,182
487,216
2,563,898
2,176,835
XII
The schedules referred above form integral part of the Balance Sheet
for and on behalf of the Board
V.C. SEHGAL
A. YAMAUCHI
PANKAJ MITAL
Chairman
Whole time Director Chief Operating Officer
G.N. GAUBA
Co. Secretary & V.P. Finance
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2005
(Figures in Rs. thousands)
Schedule
INCOME
Sale of Finished Goods (Gross)
Less: Excise duty
Sale of Finished Goods (Net)
Other Income
For the year ended For the year ended
March 31, 2005
March 31, 2004
6,368,700
833,189
5,535,511
90,939
5,218,766
647,080
4,571,686
51,211
5,626,450
4,622,897
4,492,679
264,223
19,566
3,640,043
268,665
33,160
4,776,468
3,941,868
Profit Before Taxation
849,982
681,029
Tax Expense
Provision for Current Income Tax
Provision for Deferred Income Tax (Refer A (10) & B (17) on Schedule XII)
Provision for Wealth Tax
240,000
(8,582)
500
199,500
(3,913)
500
618,064
(2,880)
620,944
596,770
484,942
435
484,507
388,919
1,217,714
873,426
150,000
234,889
32,943
799,882
100,000
156,593
20,063
596,770
1,217,714
873,426
2.64
2.06
IX
TOTAL
EXPENDITURE
Manufacturing and other expenses
Depreciation
Interest (Net)
X
XI
TOTAL
Less : Income Tax for earlier years
Profit After Taxation
Add: Balance brought forward from previous year
Surplus Available For Appropriation
APPROPRIATIONS
Transfer to General Reserve
Proposed Dividend
Tax on Dividend
Balance Carried to Balance Sheet
TOTAL
Earning per share (Basic/Diluted) of face value Re. 1/- each
(Refer B (15) on Schedule XII)
Significant Accounting Policies and
Notes forming part of the Accounts
This is the Profit & Loss Account referred to
in our report of even date
KAUSHIK DUTTA
Partner
M. No.: F 88540
For and on behalf of Price Waterhouse
Chartered Accountants
Place: Noida
Date : May 27, 2005
XII
The schedules referred above form integral part of the
Profit & Loss Account
for and on behalf of the Board
V.C. SEHGAL
A. YAMAUCHI
PANKAJ MITAL
Chairman
Whole time Director Chief Operating Officer
G.N. GAUBA
Co. Secretary & V.P. Finance
43
SCHEDULES FORMING PART OF THE BALANCE SHEET
CASH FLOW STATEMENT
(Figures in Rs. thousands)
2004-05
2003-04
Net profit before tax
849,982
681,029
Adjustments for:
Depreciation
Interest Expense
Interest Income
Income from Investment - Dividends
Lease Rent
(Profit)/Loss on Fixed Assets sold
Debts / Advances Written off
Provision for Bad & Doubtful Debts / Advances
Liability no longer required written back
Provision for Gratuity & Leave Encashment
Provision for diminution in value of Investments
Unrealised foreign exchange (gain) /loss
Provision for warranty
264,223
23,957
(4,391)
(8,083)
4,759
1,638
9
(1,664)
(10,972)
2,452
2,956
7,751
(28)
268,665
39,211
(6,051)
(80)
9,215
(4,635)
309
1,589
(5,494)
6,945
(882)
7,278
-
Operating profit before working capital changes
1,132,589
997,099
Adjustments for changes in working capital :
- (INCREASE)/DECREASE in Sundry Debtors
- (INCREASE)/DECREASE in Other Receivables
- (INCREASE)/DECREASE in Inventories
- INCREASE/(DECREASE) in Trade and Other Payables
Cash generated from operations
- Taxes (Paid)/Received (Net of TDS)
(86,144)
(91,589)
(203,377)
281,379
1,032,858
(177,535)
(157,741)
(64,484)
(162,719)
178,654
790,809
(171,072)
855,323
619,737
(811,958)
10,955
(17,281)
(2,892)
(4,759)
3,602
8,083
(500,177)
9,049
(31,346)
116,671
(9,215)
7,646
80
123,094
–
(691,156)
(407,292)
A. CASH FLOW FROM OPERATING ACTIVITIES
44
Net cash from operating activities
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets Including CWIP
- Addition During the year
Proceeds from Sale of fixed assets
Purchase of investments
Loan to Subsidiary (net)
Lease Rent Payment
Interest Received (Revenue)
Dividend Received
Consideration Received on transfer of erstwhile Elastomer Division
to a Subsidiary (refer B(14) on Schedule XII)
Net cash used in investing activities
(Figures in Rs. thousands)
2004-05
2003-04
87,398
(114,527)
199,179
(248,015)
100,000
—
(38,982)
(23,237)
(156,088)
(20,063)
—
(42,500)
59,532
(40,379)
(117,268)
(15,048)
(165,499)
(204,499)
Net Increase/(Decrease) in Cash & Cash Equivalents
(1,332)
7,946
Cash and cash equivalents as at 31.03.2004
39,258
31,825
(11,572)
—
26,354
39,771
C. CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from long term borrowings
Receipts
Payments
Proceeds from short term borrowings
Receipts
Payments
Proceeds from Cash Credits (Net)
Interest Paid
Dividend Paid
Dividend Tax Paid
Net cash used in financing activities
Cash and Cash Equivalents on transfer of erstwhile Elastomer Division
to a Subsidiary (Refer B(14) on Schedule XII)
Cash and cash equivalents as at 31.03.2005
Cash and cash equivalents comprise
Cash and cash equivalents comprise
Cash In Hand
Cheque In Hand
Balance with Scheduled Banks
Balance with Non-Scheduled Banks
Cash and cash equivalents as per Balance Sheet (restated)
Less: Net Unrealised Loss on Foreign Currency Cash & Equivalents
Total Cash & Cash Equivalents as per cash flow statement
45
2,510
1,223
14,945
7,866
26,544
(190)
26,354
1,904
2,656
33,241
1,457
39,258
513
39,771
(I)
The above Cash Flow Statement has been prepared under the Indirect Method as set out in the Accounting
Standard - 3 on Cash Flow Statement issued by the Institute of Chartered Accountant of India.
(II) Previous year’s figures have been regrouped wherever necessary to conform to the current year’s classification.
(III) Following non cash transactions have not been considered in the cash flow statement:
Tax deducted at source on income
(IV) Figures in brackets indicate cash outgo.
This is the cash flow statement referred to
in our report of even date
KAUSHIK DUTTA
Partner
M. No.: F 88540
For and on behalf of Price Waterhouse
Chartered Accountants
Place: Noida
Date : May 27, 2005
V.C. SEHGAL
Chairman
for and on behalf of the Board
A. YAMAUCHI
PANKAJ MITAL
Whole time Director Chief Operating Officer
G.N. GAUBA
Co. Secretary & V.P. Finance
SCHEDULES FORMING PART OF THE BALANCE SHEET
SCHEDULE I
SHARE CAPITAL*
(Figures in Rs. thousands)
As at
March 31, 2005
As at
March 31, 2004
Authorised
300,000,000 Equity Shares of Re. 1/- each
(Previous Year 200,000,000 Equity Shares of Re. 1/- each)
300,000
200,000
Issued
234,892,400 Equity Shares of Re. 1/- each
(Previous Year 156,596,000 Equity Shares of Re. 1/- each)
234,892
156,596
234,889
156,593
234,889
156,593
Subscribed and Paid up
234,889,200 Equity Shares of Re. 1/- each
(Previous Year 156,592,800 Equity Shares of Re. 1/- each)
(Of the above shares 6,090,000 (6,090,000) shares are allotted as fully paid
up pursuant to a contract for consideration other than cash)
(Of the above shares 165,292,400 (86,996,000) shares are allotted as fully paid
bonus shares by way of capitalisation of share premium & general reserve).
TOTAL
46
Note:
*During the year the Company made allotment of 78,296,400 equity shares of Re. 1/- each as bonus shares in proportion of one equity share for every two
equity shares. The credit of bonus shares have been given to respective beneficiary accounts of the shareholders by the depository.
SCHEDULE II
RESERVES & SURPLUS
(Figures in Rs. thousands)
As at
March 31, 2005
Revaluation Reserve
As per Last Balance Sheet
Additions during the year
Deductions during the year
20,031
—
—
Reserve on Amalgamation
(Refer B19) on schedule XII)
As per Last Balance Sheet
Additions during the year
Deductions during the year
80,352
—
—
Securities Premium Account
As per Last Balance Sheet
Additions during the year
Deductions during the year*
55,278
—
55,278
General Reserve
As per Last Balance Sheet
Additions during the year
Deductions during the year*
378,826
150,000
23,018
Profit and Loss Account
As per Last Balance Sheet
Additions during the year
Deductions during the year
596,770
353,112
150,000
TOTAL
* Utilised for capitalisation by way of bonus shares (Refer note on schedule 1)
As at
March 31, 2004
20,031
20,031
—
—
20,031
80,352
80,352
—
—
80,352
—
55,278
—
—
55,278
605,808
378,826
100,000
—
478,826
799,882
388,919
307,851
100,000
596,770
1,506,073
1,231,257
SCHEDULE III
SECURED LOANS
(Figures in Rs. thousands)
1
2
As at
March 31, 2005
As at
March 31, 2004
Short term loans from banks*
— Rupee Loan
— Foreign currency Loan
156,963
69,876
220,701
45,120
Long Term Loans #
(i) From Banks
— Rupee Loan**
— Foreign currency Loan***
—
191,770
1,650
175,982
77,572
107,945
(ii) From Others
— Rupee Loan****
TOTAL
496,181
Secured Loans referred above are :
* Secured by first charge by way of hypothecation of all present and future stocks, book debts and other specified
moveable assets of the Company .
** Secured by way of hypothecation of specific vehicles.
*** Secured by first pari-passu charge on entire fixed assets both moveable & immoveable of the company present &
future alongwith a term lender for a loan given to subsidiary and second pari-passu charge on the entire current assets of the company. These are also secured by way of deposit of title deeds of specified properties
**** Secured by hypothecation of specific moulds used for production of components.
# Long terms loans due within a Year are Rs. 87,549 thousand (Previous Year Rs. 83,988 thousand).
SCHEDULE IV
UNSECURED LOANS
(Figures in Rs. thousands)
Short term loans
— Privately Placed Debentures *
— Other Than Banks **
Long Term Loans #
From Other Than Banks
— Rupee Loan
— Foreign Currency Loan
TOTAL
As at
March 31, 2005
As at
March 31, 2004
100,000
32,400
—
—
—
73,890
32,400
76,140
206,290
108,540
* Redeemable on May 13, 2005 . Further the debentures amounting to Rs. 50,000 thousand have put / call
option at any time from seven days of issue.
** Repayable on Demand
# Long Term Loan due within a Year Rs. 73,890 thousand (Previous Year Rs. 32,400 thousand)
47
SCHEDULE V
FIXED ASSETS
(Refer A(2) on Schedule XII)
(Figures in thousands)
GROSS BLOCK
Particulars
As at
March 31,
2004
Additions
during
the year
DEPRECIATION
Deletions/
Sale/
Adjustments
Total
as at
March 31,
2005
Upto
March 31,
2004
Depreciation
for the
year
Depreciation
on Deletions/
sale/
Adjustments
Upto
March 31,
2005
As at
March 31,
2005
As at
March 31,
2004
(b)
Tangible Assets
Leasehold Land
Freehold Land
Leasehold Improvements
Building
Plant & Machinery
Furniture, Fixtures & Office Equipments
Computers
Vehicles*
Intangible Assets
Technical Knowhow Fees
Business & Commercial Rights
48
NET BLOCK
56,205
37,049
27,210
399,199
1,793,976
90,242
81,443
85,068
162,891
49,495
19,621
229,664
244,332
9,010
16,785
36,543
—
—
—
680
153,265
5,343
6,479
14,490
219,096
86,544
46,831
628,183
1,885,043
93,909
91,749
107,121
2,094
—
9,764
59,201
846,879
19,79
57,269
36,961
2,216
—
8,901
15,341
194,198
6,944
13,904
21,371
—
—
—
77
90,576
1,138
5,339
9,185
4,310
—
18,665
74,465
950,501
25,603
65,834
49,147
214,786
86,544
28,166
553,718
934,542
68,306
25,915
57,974
54,111
37,049
17,446
339,998
947,097
70,445
24,174
48,107
22,544
4,500
—
—
22,544
4,500
—
—
21,414
4,282
1,130
218
22,544
4,500
—
—
—
—
1,130
218
TOTAL
2,597,436
768,341
207,301
3,158,476
1,057,661
264,223
133,359
1,188,525
1,969,951
1,539,775
Previous Year
2,186,122
437,419
26,105
2,597,436
810,689
268,665
21,693
1,057,661
99,411
4,817
2,069,362
1,544,592
Capital Work In Progress
Addition to Fixed Assets include adjustment on account of exchange gain of Rs. 43 thousand (Previous Year exchange loss Rs. 407 thousand).
* Includes Rs. nil (Previous Year Rs.699 thousand) in respect of vehicles acquired under finance lease.
# Includes fixed assets of erstwhile Elastomer division transferred to a subsidiary (refer B(14) on schedule XII)
SCHEDULE VI
INVESTMENTS
(Figures in thousands)
(Refer A(3) on Schedule XII)
A. UNQUOTED (At Cost)
In Subsidiaries (Long-term Investments)
Motherson PUDENZ WICKMANN Ltd.*
1403226 equity shares (1403226) of Rs. 10/- each fully paid up
Draexlmaier & Motherson Electrical Systems (I) Ltd.*
2767600 equity shares (2767600) of Rs.10/- each fully paid up
Draexlmaier & Motherson Electrical Systems (I) Ltd.*
1076565 8% Non Cumulative Non Convertible Redeemable
preference shares (1076565) of 10/- each fully paid up
MSSL Mauritius Holding Ltd.*
525000 equity shares (525000) of 1 Euro each fully paid up
MSSL Mideast (FZE)*
1 equity shares (1) of AED 150000 equivalent to
Euro 46,875 each fully paid up
MSSL Handels GmbH*
1 share (1) of Euro 35000
Motherson Electrical Wires Lanka Pvt. Ltd.*
1456202 shares (1456202) of Srilankan Rs. 10/- each fully paid up
MSSL (S) Pte Ltd.*
100000 shares (100000) of S$ 1/- each fully paid up
Woco Motherson Elastomers Ltd.*
1675000 equity shares (Nil) of Rs. 10/- each fully paid up
Woco Motherson Advanced Rubber Technologies Ltd.*
50000 equity shares (Nil) of Rs. 10/- each fully paid up
In Others
(Long-term Investments)
Schefenacker Motherson Ltd.*
6712990 equity shares (6712990) of Rs. 10/- each fully paid up
Saks Ancillaries Ltd.*
1000000 equity shares (1000000) of Rs. 10/- each fully paid up
Kyungshin Industrial Motherson Ltd.*
3600000 equity shares (3600000) of Rs. 10/- each fully paid up
Motherson Air Travel Agencies Ltd.*
120000 equity shares (120000) of Rs. 10/- each fully paid up
(Current Investments)
Inapex Auto Export Pvt. Ltd
60000 equity shares (60000) of Rs. 10/- each fully paid up
Lord Krishna Bank Ltd.
8444 equity shares (8444) of Rs. 10/- each fully paid up
Cyberspace Infosys Ltd
300 equity shares (300) of Rs. 10/- each fully paid up
SKS Ltd
1000 equity shares (1000) of Rs. 10/- each fully paid up
Total (A)
As at
March 31, 2005
As at
March 31, 2004
9,045
9,045
13,838
13,838
—
—
22,452
22,452
1,997
1,997
1,835
1,835
6,857
6,857
2,655
2,655
16,750
—
500
—
67,368
67,368
10,724
10,724
36,080
36,080
1,206
1,206
—
—
102
102
—
—
—
—
191,409
174,159
49
(Figures in Rs. thousands)
As at
March 31, 2005
50
(Long-term Investments)
Motherson Sumi Infotech & Designs Ltd.*
13,800
1200000 Equity shares (1200000) of 10/- each fully paid up
(Current Investments)
94
Balrampur Chinni Mills Ltd
11200 equity shares (1000) of Rs. 10/- each fully paid up
S.J.Max Golden Co.Ltd
—
336200 equity shares (336200) of 10/- each fully paid up
Daewoo Motors Ltd
—
6150 equity shares (6150) of Rs. 10/- each fully paid up
Munjal Auto (Formerly Gujrat Cycles Ltd)
10
1000 equity shares (1000) of Rs. 10/- each fully paid up
Hero Honda Motors Ltd
4
250 equity shares (250) of Rs 2/ each fully paid up
ICICI Bank Ltd
59
150 equity shares (150) of Rs. 10/- each fully paid up
IL & FS Venture Corporation Ltd
67
1000 equity shares (1000) of Rs. 10/- each fully paid up
Inox Leasing & Finance Ltd
—
100 equity shares (100) of Rs. 10/- each fully paid up
Electrolux Kelvinator Ltd. (Formerly Intron Ltd.)
—
1250 equity shares (1250) of Rs. 10/- each fully paid up
Jaysynth Dyechem Ltd
—
100 equity shares (100) of Rs. 10/- each fully paid up
GIVO Ltd.
500
49800 equity shares (49800) of Rs. 10/- each fully paid up
Athena Financial Services (Formerly Kinetic Lease & Finance Ltd)
—
66 equity shares (66) of Rs. 10/- each fully paid up
Kinetic Motors Company Ltd
26
500 equity shares (500) of Rs. 10/- each fully paid up
LML Ltd
202
4600 equity shares (4600) of Rs. 10/- each fully paid up
Mahindra & Mahindra Ltd
407
1822 equity shares (1822) of Rs. 10/- each fully paid up
Morgan Stanley Mutual Fund
2,500
250000 Units (250000) of Rs. 10/- each fully paid up
Pearl Engineering Polymers Ltd
24
3160 equity shares (3160) of Rs. 10/- each fully paid up
Pearl Global Ltd
4
100 equity shares (100) of Rs. 10/- each fully paid up
As at
March 31, 2004
13,800
63
3,362
55
10
4
44
29
1
12
—
142
—
14
166
407
2,500
10
1
(Figures in Rs. thousands)
Subros Ltd
980 equity shares (490) of Rs. 10/ each fully paid up
Tata Motors
800 equity shares (800) of Rs. 10/- each fully paid up
Total (B)
Total (A+B)
Less: Provision for Diminution
Net Total
As at
March 31, 2005
As at
March 31, 2004
9
9
239
239
17,945
20,868
209,354
195,027
50,000
50,000
159,354
145,027
21,073
22,552
No. of Shares
Rs. in Thousands
1,675,000
50,000
120
16,750
500
31
* Trade Investment
Note :
a) Market value of quoted investments
(Based on last traded price available as at March 31, 2005)
b) Investments made during the year
Woco Motherson Elastomers Ltd.
Woco Motherson Advanced Rubber Technologies Ltd
Balrampur Chinni Mills Ltd.
SCHEDULE VII
CURRENT ASSETS, LOANS AND ADVANCES
(Figures in Rs. thousands)
As at
March 31, 2005
As at
March 31, 2004
153,558
106,091
312,626
56,742
3,165
632,182
86,636
83,468
239,139
57,278
4,311
470,832
—
3,511
3,511
3,511
—
924
3,047
3,971
3,047
924
A. Current Assets
(1) Stock in Trade
(Refer A((4) on Schedule XII)
(i) Finished Goods
(ii) Work in Progress
(iii) Raw Material & Components
(iv) Goods in Transit (Raw Material & Components)
(v) Tools, Store & Spares
TOTAL (1)
(2) Sundry Debtors*
(Unsecured, unless otherwise stated)
(i) Outstanding for more than six months
Considered Good
Considered Doubtful
Less: Provision for doubtful debts
51
SCHEDULE VII (CONTD.)
CURRENT ASSETS, LOANS AND ADVANCES
(ii) Other Debts
Considered good
Considered Doubtful
Less Provision for doubtful debts
52
TOTAL (2)
(3) Cash and Bank Balances :
(i) Cash in hand
(ii) Cheques in hand
(iii) Balance with
(a) Scheduled Banks in
(i) Current Accounts
(ii) Deposit account**
(iii) Dividend Account
(b) Non Scheduled Banks in***
(i) Current Account with Bank Austria
(ii) Current Account with HSBC Bank Middle East Ltd.
TOTAL (3)
TOTAL A (1+2+3)
B. Loans and Advances
(Unsecured, unless otherwise stated)
(i) Advances recoverable in cash or in kind
or for value to be received ****
— Considered good
— Considered doubtful
Less Provision for doubtful advances
(ii) Loan to Subsidiaries
(iii) Deposits with Excise, Customs & Govt Authorities
TOTAL B
GRAND TOTAL (A+B)
(Figures in Rs. thousands)
As at
March 31, 2005
As at
March 31, 2004
569,373
2,800
572,173
2,800
569,373
569,373
521,473
4,186
525,659
4,186
521,473
522,397
2,510
1,223
1,904
2,656
9,597
2,984
2,363
28,719
2,694
1,828
2,158
5,709
695
762
26,544
1,228,099
39,258
1,032,487
219,135
4,116
223,251
4,116
219,135
17,587
135,758
212,243
4,858
217,101
4,858
212,243
13,689
76,643
372,480
302,575
1,600,579
1,335,062
* Includes due from subsidiaries Rs.13,470 thousand (Previous Year Rs. 19,374 thousand)
** Includes Deposits pledged with Excise & Sales Tax authorities Rs.156 thousand (Previous Year Rs. 30 thousand) and margin
money Rs. 2,560 thousand (Previous Year Rs. 2,560 thousand)
*** Maximum balance outstanding during the Year Rs. 10,385 thousand (Previous Year Rs. 4,884 thousand)
****
i) Includes due from subsidiaries Rs. 891 thousand (Previous Year Rs. 1,420 thousand)
ii) Includes capital advances of Rs. 64,428 thousand (Previous Year Rs. 82,597 thousand)
SCHEDULE VIII
CURRENT LIABILITIES AND PROVISIONS
(Figures in Rs. thousands)
As at
March 31, 2005
As at
March 31, 2004
17,278
714,085
122,172
34,321
11,812
527,955
59,467
21,503
2,364
1,015
1,860
295
891,235
622,892
267,832
500
89,319
14,539
1,972
374,162
1,265,397
176,656
1,500
32,711
12,087
2,000
224,954
847,846
A. Current Liabilities
(Refer B(3) on Schedule XII)
(i) Sundry Creditors*
Small Scale Industrial Undertakings
Others
(ii) Advance from customers
(iii) Other Liabilities
(iv) Investor Education & Protection Fund shall be
credited by the following amount:
- Unpaid Dividend
(v) Interest Accrued but not due
TOTAL (A)
B. Provisions
(Refer A(5) & A (10) and B (18) on Schedule XII)
(i) For Dividend (including tax thereon)
(ii) For Wealth tax
(iii) For Income tax (net)**
(iv) For Employee benefit
(v) For Warranty
Total (B)
TOTAL(A+B)
* Includes due to subsidiaries Rs. 30,030 thousand (Previous Year Rs. 7,644 thousand)
** Net of Advance Tax Rs. 464,525 thousand (Previous Year Rs. 302,120 thousand)
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT
SCHEDULE IX
OTHER INCOME
(Figures in Rs. thousands)
For the year ended For the year ended
March 31, 2005
March 31, 2004
1) Non-operating Income
(a) Dividend Received *
- From Other than subsidiary companies
(b) Rent
(c) Change in carrying amount of current investments
(d) Service Income
(e) Sundries written back
(f) Miscellaneous Income
(g) Exchange fluctuation (net)
(h) Profit on sale of Fixed assets (net)
TOTAL
Tax deducted on source
(a) Rent
(b) Misc.Income
* Includes dividend from
Short term Non- Trade investments
8,083
12,830
—
9,227
10,972
30,486
19,341
—
80
8,232
882
8,663
5,494
23,225
—
4,635
90,939
51,211
2,699
711
1,687
611
883
80
53
SCHEDULE X
COST OF MATERIALS AND
MANUFACTURING & OTHER EXPENSES
(Figures in Rs. thousands)
For the year ended For the year ended
March 31, 2005
March 31, 2004
Materials consumed
Opening Stock
Raw materials
Work-in-progress
Finished goods
Add : Purchases of Raw materials
Less : Closing Stock
Raw materials
Work-in-progress
Finished goods
54
Less : Transfer of Elastomer Division to a
Subsidiary (Refer B (14) on Schedule XII)
Raw materials
Work-in-progress
Finished goods
Total consumption for goods sold
Salary, wages & bonus
Contribution to Provident & Other Fund
Staff Welfare
Electricity, Water and Fuel
Repairs and Maintenance :
Machinery
Building
Others
Consumption of Store and Spare parts
Conversion charges
Lease rent (Refer A(9) & B(16) on schedule XII)
Rent
Rates & taxes
Insurance
Donation
Travelling
Freight & forwarding
Royalty
Cash Discount
239,139
83,468
86,636
409,243
170,762
56,721
45,943
273,426
3,141,621
2,427,758
(312,626)
(106,091)
(153,558)
(239,139)
(83,468)
(86,636)
(16,422)
(5,854)
(520)
(595,071)
—
—
—
(409,243)
2,955,793
2,291,941
411,148
40,687
49,868
129,038
323,460
36,736
47,198
111,060
59,491
44,138
47,446
78,904
105,428
4,759
30,692
8,309
18,401
4,414
95,286
76,300
33,938
13,513
71,502
34,158
51,718
65,662
100,621
9,215
28,510
9,304
15,417
2,930
90,578
60,016
27,637
12,421
SCHEDULE X (CONTD.)
COST OF MATERIALS AND
MANUFACTURING & OTHER EXPENSES
(Figures in Rs. thousands)
For the year ended For the year ended
March 31, 2005
March 31, 2004
Commission
Loss on sale of fixed assets (net) *
Provision for dimunition in value of Short Term Investments
Bad Debts / Advances written off
Doubtful Debts/ Advances
Legal & professional expenses
Exchange fluctuation(net)
Miscellaneous expenses
TOTAL
1,197
1,638
2,956
9
—
99,613
—
179,713
3,409
—
—
309
1,589
71,236
11,305
162,111
4,492,679
3,640,043
* Includes loss on transfer of erstwhile Elastomer Division (Refer B (14) on Schedule XII)
SCHEDULE XI
INTEREST (NET)
Interest Expense
-Subsidiaries
-Privately Placed Debentures
-Fixed loans
-Others
Less : Interest Income (Gross)
-From Subsidiaries
-From Bank Deposits
-From Income Tax Refund
-From Employees
TOTAL
(Figures in Rs. thousands)
For the year ended For the year ended
March 31, 2005
March 31, 2004
120
3,678
8,491
11,668
—
—
18,598
20,613
2,335
388
1,452
216
5,471
296
—
284
19,566
33,160
390
101
Tax deducted on source
Interest Income
55
SCHEDULES FORMING PART OF THE ACCOUNTS
SCHEDULE XII
SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE ACCOUNTS
A. SIGNIFICANT ACCOUNTING POLICIES
1. Convention
The Financial Statements are prepared under the historical cost convention as modified to include revaluation of
certain fixed assets as indicated in (2) below, in accordance with applicable Accounting Standards issued by the
Institute of Chartered Accountants of India and relevant presentational requirements of the Companies Act, 1956.
2. Fixed Assets and Depreciation
Fixed Assets
i)
ii)
The fixed assets except as stated in (ii) below are stated at cost less accumulated depreciation. Cost of acquisition
or construction is inclusive of inward freight, duties and taxes and other incidental expenses.
The fixed assets of the Component Division of erstwhile Motherson Auto Components Engineering Limited
(MACE) have been stated at an amount inclusive of appreciation arising on revaluation of the assets by an
approved valuer on December 31, 1998. The method adopted for revaluation of the assets are as under:
a) Land: Prevailing market rate of land as on the date of revaluation.
b) Buildings, Indigenous Plant and Machinery, Furniture and Fixtures, Moulds and Dies: Replacement value.
c) Vehicles: Current price of the vehicles and reducing depreciation for the numbers of years of use and also
considering the value in secondary car market.
d) Air conditioning and Electrical Equipment: Present value of the assets taking into consideration the original
cost and price inflation index.
56
The Company charges assets Costing less than Rs 5,000 to expense, which could otherwise have been
included as Fixed Asset, because the amount is not material in accordance with ‘Accounting Standard
10-Accounting for Fixed Assets’
Depreciation
i)
Depreciation on fixed assets except as stated in (ii) to (iv) below, is provided from the month the asset is ready
for commercial production on a pro-rata basis at the SLM rates prescribed in schedule XIV to the Companies
Act, 1956 or based on useful life, whichever is higher. In accordance with the above policy the following assets
are depreciated, at rates higher than those prescribed in schedule XIV of the Companies Act, 1956:
Rate (%)
Computers
Vehicles
Plant & Machinery (Racks, Stands & Trolleys)
Specific Identified Plant & Machinery
33.33
25
100
25
ii)
In respect of revalued assets, depreciation is being provided on the revalued amounts over the remaining
useful life of the assets at the SLM rates. Leasehold Land is amortised over the balance period of lease.
iii) Technical Know How fees paid to a foreign collaborator by the erstwhile Elastomer Division is being
depreciated on a straight line basis over the remaining tenure of the agreement.
iv) The amount paid for business and commercial rights by the erstwhile Elastomer Division is being depreciated
over the remaining tenure of agreement.
3. Investments
Investments are classified into long term and current investments. Long-term investments are stated at cost. A provision
for diminution is made to recognise a decline, other than temporary, in the value of long term investments.
Current investments are carried at lower of cost and fair value. Fair value in the case of quoted investments refers
to the market value of the investments arrived at on the basis of last traded prices as at the year-end.
4. Inventories
Stores and spares, loose tools are valued at cost or net realisable value, whichever is lower.
Raw materials, components, finished goods and work in progress are valued at cost or net realisable value, whichever
is lower. The basis of determining cost for various categories of inventories are as follows:
i)
ii)
Stores and Spares, Raw Materials and
Components
Work in Progress and Finished Good
iii) Tools
- First in First Out (FIFO) method
- Material cost plus appropriate share of labour and
production overheads.
- Cost less amor tisation based on useful life of the
items ascer tained on a technical estimate by the
management.
5. Retirement Benefits
The Company’s contribution to defined contribution schemes such as provident fund, family pension fund and
superannuation fund are charged to the profit and loss account as incurred. The Company also provides gratuity
benefits to the employees, which is funded through a LIC group gratuity scheme. The liability at the year-end for the
same is determined by an actuarial valuation done at year-end and shortfall/surplus over the amount contributed
to the scheme is charged off to the profit and loss account or treated as prepaid, as the case may be. Provision for
Leave Encashment is made on the basis of actuarial valuation done at the year-end.
6. Revenue Recognition
Sales are recognised upon the transfer of significant risks and rewards of ownership to the customers.
7. Foreign Exchange Transactions
Transactions involving foreign currencies are recorded at the exchange rate prevailing on the transaction date. Foreign
currency monetary items are translated at the exchange rate prevailing at the balance sheet date and the gain/loss
arising on such translation other than monetary items related to acquisition of fixed assets is credited / charges to
profit and loss account. The gain/loss arising on translation of monetary items related to acquisition of fixed assets
are adjusted to the cost of fixed assets. Premium or discount arising at the inception of a forward exchange contract
is amortised as expense or income over the life of contract.
8. Borrowing Costs
The borrowing costs on funds other than those directly attributable to the acquisition of a qualifying asset i.e. an
asset that necessarily takes a substantial period of time to get ready for its intended use, are charged to revenue in
the period in which they are incurred.
The borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets
are capitalised as part of the cost of that asset.
9. Leases
Lease rental in respect of operating lease arrangements are charged to expense when due as per the terms of the
related agreement on a straight-line basis.
Lease rentals in respect of finance lease transactions entered into prior to 31st March 2001 is charged to expense
when due as per the terms of the related agreement. Finance lease transactions entered into after this date are
considered as financing arrangements in accordance with Accounting Standard 19 and the leased asset is capitalized
at an amount equal to the present value of future lease payments and a corresponding amount is recognized as a
liability. The lease payments made are apportioned between finance charge and reduction of outstanding liability in
relation to leased asset.
10. Taxation
Current Tax
Current tax is provided on the basis of tax payable on estimated taxable income computed in accordance with the
applicable provisions of Income tax Act, 1961 after considering the benefits available under the said Act.
57
Deferred Taxes
In accordance with Accounting Standard 22 – Accounting for Taxes on Income, issued by the Institute of Chartered
Accountants of India, the deferred tax for timing differences between the book and tax profits for the year is accounted
for using the tax rates and laws that have been enacted or substantially enacted as of the balance sheet date.
Deferred Tax Assets arising from temporary timing differences are recognised to the extent there is reasonable
certainty that the assets can be realised in future.
B.
NOTES TO THE ACCOUNTS
1. Contingent Liabilities :
a)
b)
c)
d)
e)
f)
g)
h)
58
i)
In respect of Excise *
In respect of Entry Tax
In respect of Sales Tax
In respect of Service tax
In respect of Stamp Duty
In respect of Income Tax
In respect of Labour Cases
The Company has given corporate guarantee in respect of: **
i) Subsidiary company #
ii) Joint Ventures
Bank Guarantees furnished by the company
(Rs. in thousands)
As at
March 31, 2005
As at
March 31, 2004
24,303
145
4,851
3,523
3,608
864
11,365
21,844
107
3,147
6,507
4,742
1,331
4,332
553,205
97,500
36,349
248,160
79,355
42,719
* Excludes interest.
** Actual amount outstanding
Subsidiary Company
Rs. 367,311 thousand (Rs. 221,596 thousand)
Joint Ventures
Rs. 141,528 thousand (Rs. 65,900 thousand)
# The guarantee given on behalf of MSSL Mideast (FZE), (a subsidiary) is further to be secured by a charge to be
created on all assets including moveable & immoveable properties both present & future subject to prior charges on
current assets created in favour of company’s bankers for working capital loans.
2. Outstanding Capital Commitments :
(Rs. in thousands)
As at
As at
March 31, 2005 March 31, 2004
Unexpired amount of the contracts on capital
accounts and not provided for (net of advance)
Outstanding Lease Commitments
328,729
—
244,905
28
3. The small scale industrial undertakings to whom the Company owes and which is outstanding for more than 30 days as at March
31, 2005 are:
Alfa Industries, Alfa Rubber & Springs P Ltd, Ashoka Insulation, Aunde Faze Three Autofab Ltd, Autonix Auto Industries P Ltd, Bafna
Packaging Pvt Ltd, Bhilwara Melba De Wittee Pvt Ltd, Cello Plast Industries, Chaitanya Dip Moulding Works, Chennai Polypack Pvt
Ltd, Concept Engineering India Pvt Ltd, Evergreen Packers, Exotech Plastics Pvt Ltd, Falcon Packers, Grand Industries, Hartech Plastics
P Ltd, Indica Chemical Inds. Ltd, Interface Connectronics Ltd, Interface Microsystems, Krishna Packing Cases, L.M.C.Enterprises P.
Ltd., Microtec Services, Nippon Audiotronix, Pacoline Industries, Paragon Autotech Products Pvt Ltd, Pioneer Industries, Pranay
Insulations And Packaging (P) Ltd, Priya Plastics, Protochem Industries Pvt Ltd, R. Engineering, Raj-Shree Industries, Sakshi Poly Tubes
Pvt Ltd, Senna Polymers, SGR Elastomers (India) Pvt.Ltd, Shree Balasai Industries, Shree Shive Engg Works, Shriram Engineering,
Sree Ganapathy Industries, Techno Auto Components (I) Pvt. Ltd.
The above information regarding small scale industrial undertaking has been determined to the extent such parties
have been identified on the basis of information available with the Company.
4. Managerial Remuneration :
(Rs. in thousands)
For the year ended
March 31, 2005 #
a)
Salaries
b) Contribution to Provident and other Funds
c)
Perquisites
d) Directors Sitting Fees
TOTAL
For the year ended
March 31, 2004
2,701
2,349
313
240
2,384
2,567
235
250
5,633
5,406
# As the employee-wise break up of gratuity and leave encashment is not ascertainable, the amount related to one
of the directors has not been included in the above particulars.
Further the appointment and remuneration of one of the managerial personnel is subject to the approval of the
company in the annual general meeting.
5. Payment to Auditors (including service tax) :
(Rs. in thousands)
For the year ended
March 31, 2005
For the year ended
March 31, 2004
3,196
2,808
b) Taxation Matters
101
102
c)
252
213
—
2,326
3,549
5,449
a)
Statutory Audit Fee
Reimbursement of Expenses
d) Others (certification charges & other services)
TOTAL
6. Value of imports on CIF Basis in respect of :
(Rs. in thousands)
For the year ended
March 31, 2005
For the year ended
March 31, 2004
1,195,511
907,513
b) Capital Goods
85,371
149,237
c)
34,649
37,348
a)
Raw Material
Spare Parts
59
7.Expenditure in foreign currency on account of: (Cash Basis) (Net of Taxes)
(Rs. in thousands)
a)
b)
c)
d)
e)
f)
g)
For the year ended
March 31, 2005
For the year ended
March 31, 2004
22,760
44,314
1,957
16,914
6,730
—
35,924
27,651
37,810
1,397
27,087
—
2,107
48,113
Royalty
Travelling
Interest
Professional Fee
Technical Assistance fess
Commission
Others (Includes software charges, training,
salary, bank charges, moulds purchased &
Representative office expenses of salary, rent etc)
8. Value of imported and indigenous consumed and percentage of each to total consumption:
A. Raw Materials and Components
(Rs. in thousands)
(%)
60
a) Imported
b) Indigenous
TOTAL
For the year ended (%) For the year ended
March 31, 2005
March 31, 2004
40
60
1,216,342
1,835,370
34
66
802,190
1,557,191
100
3,051,712
100
2,359,381
B. Stores & Spares
(Rs. in thousands)
a) Imported
b) Indigenous
TOTAL
(%)
For the year ended
March 31, 2005
(%) For the year ended
March 31, 2004
42
58
33,464
45,440
31
69
20,343
45,319
100
78,904
100
65,662
9. Actual Production, opening stock, closing stock and sales:
A. Quantity
(Numbers in thousands)
For the year ended
For the year ended
March 31, 2005
March 31, 2004
Wiring
High
Harness Tension
Cords
(No’s.)
(No’s.)
Opening Stock
Production
Total
Sales/Consumption
Closing Stock
185
12,647
12,832
12,583
249
7
356
363
362
1
Rubber
Comp.
Plastic
Comp.
(No’s.)
(No’s.)
671
21,270
21,941
21,941
—
319
27,991
28,310
27,971
339
Wiring
High
Wires Harness Tension
Cords
(Km’s.)
(No’s.)
(No’s.)
9
362
371
358
13
180
12,858
13,038
12,853
185
5
343
348
341
7
Rubber
Comp.
Plastic
Comp. Wires
(No’s.)
(No’s.) (Km’s.)
339
128,718
129,057
128,386
671
304
22,327
22,631
22,312
319
10
360
370
361
9
B. Value
(Rs. in thousands)
For the year ended
March 31, 2005
Wiring
Harness
Opening Stock
Sales
Closing stock
44,981
3,826,407
59,588
High Rubber
Tension Comp.
Cords
1,200
106,132
9
1,613
58,720
—
For the year ended
March 31, 2004
Plastic
Comp.
Wires Others*
1,292
959,667
3,263
24,135
342,413
61,944
13,415
242,172
28,754
Total
86,636
5,535,511
1,53,558
Wiring
High
Harness Tension
Cords
20,825
2,841,381
44,981
637
105,568
1,200
Rubber Plastic
Comp. Comp.
405
350,966
1,613
2,351
680,048
1,292
Wires Others*
17,632
239,379
24,135
Total
4,093
354,344
13,415
45,943
4,571,686
86,636
* Quantitative information in respect of value disclosed in others is not being given separately as the related revenue and costs are
less than 10% of total revenue and cost of the Company.
10. Earnings in foreign currency during the year :
(Rs. in thousands)
a)
b)
c)
d)
FOB value of Exports*
Interest Received from Subsidiary
Reimbursement from Customers
Service Income
For the year ended
March 31, 2005
For the year ended
March 31, 2004
1,031,660
689
1,476
6520
929,415
5,471
5,482
8,663
*Include Deemed Exports of Rs. 18,777 thousand (Previous year Rs. 10,883 thousand)
11. Remittance in foreign currency during the year on account of dividend :
(Rs. in thousands)
a) Amount remitted
b) Number of non-resident shareholders
c) Number of shares held by them (in thousands)
(Refer Schedule 1)
d) Year to which dividend pertains
For the year ended
March 31, 2005
For the year ended
March 31, 2004
54,338
2
54,338
40,753
2
10,868
Year ended March 31, 2004
Year ended March 31, 2003
12. Licensed and Installed Capacity :
(Figures in thousands)
a) Licensed Capacity
b) Installed Capacity of*
a) Wiring Harness (Nos.)
b) High Tension Cords (Nos.)
c) Rubber Components (M. T.)
d) Plastic Components (M. T.)
e) Wires (Km’s.)
c) Actual Production of
a) Wiring Harness (Nos.)
b) High tension Cords (Nos.)
c) Rubber Components (Nos.)
d) Plastic Components (Nos.)
e) Wires (Km’s.)
For the year ended
March 31, 2005
For the year ended
March 31, 2004
N.A.
N.A.
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
12,647
356
21,270
27,991
362
110,211
343
128,718
22,327
360
* Not ascertainable as the products manufactured by the company are of variable size & technical complexities.
61
13. Raw Materials and Components consumed during the year :
(Figures in thousands)
For the year ended
March 31, 2005
Raw Materials and Components
a) Copper (Kg’s.)
b) Others*
Qty
5,152
—
Value
820,939
2,230,773
For the year ended
March 31, 2004
Qty
3,373
—
Value
457,553
1,901,828
*No single raw material or components account for more than 10% of total consumption.
14. The Company has entered into a Joint Venture Agreement with WOCO Franz Josef Wolf Holding GmbH & WOCO
Industrieteknik GmbH on May 16, 2004 to establish a new Joint venture entity and transfer its existing Elastomer
business as a going concern comprising of all fixed assets (excluding Land & Building), inventories, other current
assets, accruals and liabilities having following book values as at May 31, 2004 at an agreed selling price of Rs. 123,094
thousand.
(Figures in thousands )
62
Fixed Assets ( Excluding Land and Building)
Current Assets:
Cash & Bank
Inventories
Debtors
Advances recoverable in cash or in kind
Total
Current Liabilities:
Sundry Creditors
Other Liabilities
Total
(A)
68,950
(B)
11,572
42,027
39,748
3,633
96,980
(C)
34,654
581
35,235
Total (A) + (B) – (C)
130,695
Pursuant to the above agreement, a company, Woco Motherson Elastomer Ltd. (WMEL) was incorporated on March
16, 2004. During the year, the company has subscribed to 1,675,000 equity shares of Rs 10/- each of WMEL.
15. Earnings per share
For the year ended
March 31, 2005
For the year ended
March 31, 2004
Weighted Average number of Equity Shares of
Re. 1 /- each (Previous Year Re 1/- each )
234,889,200
234,889,200 *
outstanding at the end of the year
Net profit after tax available for equity
Shareholders (Rs in thousand)
620,944
484,507
Basic/ Diluted Earnings (in Rupees) Per Share of
2.64
2.06
Re. 1/- each. (Previous Year Re 1/- each )
*Consequent to the issue of equity shares of 78,296,400 as bonus shares in proportion of one equity share for
every two equity shares.
16. Leases
Leases payment made under cancelable operating leases have been recognized as an expense in the Profit and Loss
Account. The Company has not entered into any non-cancelable operating lease. In respect of finance lease
entered into by the company during the year minimum lease payment outstanding and their present value at balance
sheet date is as under::
(Rs. in thousands)
Particulars
Due within one year
Minimum Lease
payments
Current Previous
Year
Year
—
391
Finance
Charges
Current Previous
Year
Year
—
13
Present value of
Lease payments
Current
Previous
Year
Year
—
378
Consequent to the end of the period of lease the company has purchased the assets.
17. Deferred Tax
(i) The break up and movement of net deferred tax liability for the year ended March 31, 2005 is as under:
(Rs. in thousands)
For the year ended
March 31, 2005
Timing differences
on account of:
Deferred
Tax Assets
For the year ended
March 31, 2004
Deferred Charge/
Tax Liability (Credit)
Deferred
Deferred
Tax Assets Tax Liability
Depreciation
Provision for Diminution in Investments
Debtors/Loans & Advances
Employee Benefits
Miscellaneous Expenditure
—
1,017
3,510
3,211
712
128,915
—
—
—
—
(8,779)
(606)
828
(669)
644
—
411
4,338
2,542
1,356
137,694
—
—
—
—
Total
8,450
128,915
(8,582)
8,647
137,694
Net Deferred Tax Liability
120,465
129,047
(ii) In view of the Company’s past financial performance and future profit projections, the company expects to
fully recover the Deferred Tax Assets.
18. The company has the following provision in the books of accounts as on March 31,2005
Description
Warranty
Balance as
On
01.04.2004
Additions
during
year
Utilised/
Reversed
during year
Balance
as on
31.03.2005
2,000
572
600
1,972
Warranty provision relate to the estimated outflow in respect of warranty for products sold by the company. Due
to the very nature of such costs, it is not possible to estimate the timing / uncertainties relating to the outflows of
economic benefits
19. Reserve on Amalgamation
The “Reserve on Amalgamation” was created during the financial year 2001-2002 on the amalgamation of erstwhile
Motherson Sumi Electric Wires Limited (MSEW) and erstwhile Motherson Automotive Technologies and Engineering
Limited (MATE) with the company. The reserve amounting to Rs. 80,352 thousand is in the nature of a free
reserve.
20. Related Party disclosures
Related party disclosures, as required by AS18, “Related Party Disclosures”, are given below:
I
Relationships where control exists:
Subsidiaries of the company:
MSSL Mauritius Holdings Limited
MSSL Mideast (FZE)
63
MSSL Ireland Pvt. Ltd.
Motherson PUDENZ WICKMANN Limited
Draexlmaier & Motherson Electrical Systems India Limited
MSSL Handels GmbH
Motherson Electrical Wires Lanka (P) Ltd.
MSSL Hag Toolings Ltd. (FZC)
MSSL (S) Pte Ltd
WOCO Motherson Elastomers Limited
WOCO Motherson Advanced Rubber Technologies Ltd.
MSSL GmbH
MSSL (GB) Limited
II. Other Related Parties
a. Joint Ventures:
Kyungshin Industrial Motherson Limited
Schefenacker Motherson Limited
WOCO Motherson Ltd. (FZC)
b. Associate Companies:
Saks Ancilliaries Limited
64
c. Key Management Personnel:
i) Board of Directors:
Mr. V C Sehgal
Mr. Toshimi Shirakawa
Mr. M S Gujral
Mr. R Ganapati
Mr. Bimal Dhar
Mr. H Murai
Mr. A Yamauchi
Mr. M Matsushita
Maj. Gen Amarjit Singh (Retd)
Mr. Pankaj Mital
ii) Other Key Management Personnel:
Mr. Vivek Avasthi
Mr. Ramesh Dhar
Mr. Ravindra Mathur
Mr. G.N. Gauba
Mr. Vijay Mediratta
Mr. N Ramanathan
iii)Relatives of Key Management Personnel:
Mr. Laksh Vaaman Sehgal
Mrs. Renu Sehgal
Ms. Vidhi Sehgal
Mrs. Geeta Soni
Mrs. Neelu Mehra
Mrs. Sunita Gauba
Mr. P. Avasthi
Mrs. P. Avasthi
Mr. Harjit Singh
Ms. Upkar Gujral
Ms Subina Avasthi
d. Companies in which Key Managerial Personnel or their relatives have significant influence:
Motherson Air Travel Agencies Limited
Motherson Advanced Systems and Solutions Limited
Sumi Motherson Innovative Engineering Limited
MothersonSumi Infotech and Designs Limited
Motherson Techno Tools Limited
Motherson Sehgal Cables
Vaaman Auto Industries
Ganapati Auto Industries
Motherson Auto Private Limited
South City Motors Ltd.
A Basic Concepts Designs Pty Ltd.
A Basic Concepts Designs India Private Ltd.
Motherson Engineering Research and Integrated Technologies Limited
Motherson Triplex & Optic System Technologies Pvt. Ltd.
ASI Motherson Communication Solution Ltd.
SWS India Management Support & Services (P) Ltd.
Motherson Advance Polymers Ltd.
Moon Meadows Pvt. Ltd.
Sis Bro Creations Pvt. Ltd.
Radha Rani Motors Pvt Ltd.
Motherson Advanced Auto Solutions Pvt. Ltd.
Motherson Tool Engg. & Design Pvt. Ltd.
Motherson Auto Solutions Pvt. Ltd.
Motherson Automations Pvt. Ltd.
Motherson Advanced Auto Engg. Pvt. Ltd.
Motherson Consultancy Pvt. Ltd.
Samvardhana Motherson Finance Ltd.
ATAR Mauritius Pvt. Ltd.
e. Joint Venturers:
Sumitomo Wiring Systems Limited, Japan
Lisa Draexlmaier GmbH, Germany
Wilhelm Pudenz GmbH, Germany
Schefenacker International AG & Co.
Kyungshin Industrial Co., Korea
WOCO Franz Josef Wolf Holding GmbH
Hag Kunststofftechnik GmbH
65
III. Details of transactions, in the ordinary course of business at commercial terms, and balances with related parties as
mentioned in I & II above:
(Rs. in thousands)
S.No. Particulars
mentioned
in 20 (II) (b) &
Parties mentioned Parties mentioned Parties mentioned
Parties
in 20 (1) above
in 20 (II) (a) &
in 20 (II) (c)
(II) (e) above
(d) above
above
Previous Current Previous Current
Previous Current Previous
Current
Year
Year
Year
Year
Year
Year
Year
Year
1
2
3
4
5
6
7
8
72,585
7,649
2,383
190,653
2,851
11,920
3,361
34,098
—
34
23,283
1,647
8,879
243
510,073
360
—
182,930
3,241
12,801
21
659,450
1,078
—
84,598
2,246
19,887
738
11,528
5,696
11
346,364
21,269
177,806
1,776
6,536
5,107
—
363,431
7,589
173,843
2,877
—
—
—
—
—
2,349*
—
—
—
—
—
—
2,864
—
17,250
—
11,346
—
—
33,938
20,000
27,940
—
—
—
—
—
—
—
—
—
2,335
120
—
—
—
5,472
—
—
—
—
—
1,653
39,150
7,200
—
—
1,646
29,363
—
—
—
—
48,450
—
—
—
2,229
33,124
—
12,782
—
—
9,761**
—
12,873
—
—
4,615
—
5,000
—
—
—
—
225,000
—
—
5,000
198,203
—
—
—
267,500
—
—
9
10
11
12
13
14
15
16
Sale of Goods
Rendering of Services
Sale of Fixed Assets
Purchase of Goods
Purchase of Fixed Assets
Purchase of Services
Reimbursement
Investments made
during the year
Royalty
Remuneration/Sitting
Fees of Directors
Interest Income
Interest Expense
Dividend Paid
Dividend Received
Inter Corporate Deposits
accepted during the year
Inter Corporate Deposits
repaid during the year
(Rs. in thousands)
S.No. Particulars
mentioned
in 20 (II) (b) &
17
18
19
20
21
22
23
24
25
*
**.
Inter Corporate Deposits
placed during the year
Balances as at year end
Investments
Security Deposits Received
Security Deposits Given
Loans & Advances Payable
Loans Receivable
Guarantees Closing
Trade Payable
Trade Receivable
Parties mentioned Parties mentioned Parties mentioned
Parties
in 20 (1) above
in 20 (II) (a) &
in 20 (II) (c)
(II) (e) above
(d) above
above
Previous Current Previous Current
Previous Current Previous
Current
2,866
77,222
—
—
—
—
—
—
75,928
—
—
—
17,587
553,205
30,030
14,361
58,678
—
—
—
13,689
248,160
7,644
20,794
103,448
—
—
73,890
936
97,500
67,173
90,844
103,448
—
—
76,140
—
79,355
27,358
74,377
25,730
2,743
8,066
—
5,969
—
81,185
19,446
25,730
—
2,626
—
—
—
63,574
5,247
—
542
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Rent of Rs.2, 349 thousand paid to relatives, Mr. V.C Sehgal, Mr. Laksh Vaaman Sehgal, Mrs. Renu Sehgal, Ms. Vidhi Sehgal & Mr. P. Avasthi.
Dividend of Rs. 9,761 thousand paid to relatives, Mr. Laksh Vaaman Sehgal, Mr.V.C. Sehgal, Mrs. Neelu Mehra Mrs. Geeta Soni, Ms.Vidhi Sehgal,
Mr Pankaj Mital, Mr M.S. Gujral, Mr G.N.Gauba, Mr Vivek Avasthi, Mrs. Renu Sehgal, Ms. Padma Avasthi, Mrs Subina Avasthi, Mr Upkar Gujral &
Mr Harjit Singh
21. Segment Information
a) Information about Primary Business Segments
(Rs. in thousands)
66
Automotive
Previous
Current
Year
Year
Segment revenue
External
Inter segment
6,957
Total revenue
5,081,867
9,839
5,072,028
Non Automotive
Unallocated
Current Previous Current
Previous
Year
Year
Year
Year
Total
Current Previous
Year
Year
4,209,893 5,32,901
6,957
—
4,202,936 5,32,901
410,766
—
410,766
21,521
—
21,521
9,195 5,636,289 4,629,854
—
9,839
9,195 5,626,450 4,622,897
63,767
—
—
—
—
—
850,984
711,259
—
33,160
—
—
196,522
—
19,566
(18,564)
849,982
229,038
620,944
33,160
(2,930)
681,029
196,522
484,507
Results
Segment result
Inter segment
Interest expense
(net of Interest income)
Other Unallocable (Net of Income)
Profit before taxation
Provision for taxation
Net profit after tax
Other items
Segment assets
Segment liabilities
Capital expenditure
Depreciation
758,216
—
647,492
—
92,768
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
19,566
—
— (18,564)
—
—
— 229,038
—
—
3,386,912
827,196
720,277
256,631
2,691,529
598,027
420,693
265,292
265,133
77,168
48,064
7,592
174,195 177,250
36,798 1,183,969
16,726
—
3,373
—
b) Information about Secondary Business Segments
India
Outside India*
Revenue by geographical markets
Current
Year
External
4,547,636
Total
4,547,636
Carrying amount of segment assets
3,447,260
Addition to fixed assets
766,321
* Includes Europe, Americas, Asia Pacific and Middle East
Previous
Year
Current
Year
3,664,777 1,057,901
3,664,777 1,057,901
2,752,861 204,785
435,424
2,020
(Rs. in thousands)
Unallocated
Previous Current
Year
Year
948,925
948,925
112,863
1,995
158,957 3,829,295 3,024,681
1,002,006 2,088,333 1,636,831
— 768,341 437,419
— 264,223 268,665
20,913
20,913
177,250
—
Previous
Year
Total
Current
Year
Previous
Year
9,1955,626,450 4,622,897
9,195 5,626,450 4,622,897
158,957 3,829,295 3,024,681
— 768,341 437,419
c) Composition of Business Segments
The Company is organised into two main business segments, namely:
Automotive
Wiring Harness, High Tension Cords, Wire, Plastic Components,
Rubber Components
Non Automotive
Wiring Harness, Pen-Stamp Assembly, Plastic Components, Household Wires, Plates
d) Inter Segment Transfer Pricing
Inter Segment prices are normally negotiated amongst the segments with reference to the costs, market prices and
business risks, with an overall optimisation objective for the company.
22. Interests in Joint Ventures:
The company’s interests, as a venture, in jointly controlled entities as at March 31, 2005 are: Name of the Company
Country of
% Voting power
Incorporation
held As at
March 31, 2005
Schefenacker Motherson limited
Kyungshin Industrial Motherson Limited
India
India
49%
50%
% Voting power
held As at
March 31, 2004
49%
50%
The following amounts represent the Groups share of the assets and liabilities and revenue and expenses of the joint
venture and are included in the consolidated balance sheet and consolidated profit & loss account:
(Rs. in thousands)
Particulars
Assets
Fixed Assets
Capital Work in Progress
Current Assets
Miscellaneous Expenditure
Liabilities
Secured Loans
Unsecured Loans
Current Liabilities & Provisions
Deferred Tax (Net)
Reserves & Surplus
Revenues
Sales
Other Income
Expenditure
Profit before Tax
Provision for Tax
Profit after Tax
2005
2004
143,925
4,737
286,665
8
73,511
16,450
185,379
16
72,429
6,000
215,302
(4,096)
42,570
43,179
986
136,953
1,464
(10,356)
880,350
8,485
803,473
85,362
20,102
65,260
653,739
5,406
614,449
44,696
10,996
33,700
22. The company is in the process of completing the required transfer pricing study. The impact if any, which may arise
consequent to the study, has not been considered in these accounts and would be accounted on completion of the said
study.
23. The corresponding figures of previous year have been regrouped, rearranged wherever necessary.
for and on behalf of the Board
V.C. SEHGAL
Chairman
A. YAMAUCHI
Whole time Director
PANKAJ MITAL
Chief Operating Officer
G.N. GAUBA
Co. Secretary & V.P. Finance
.
Place: Noida
Date : May 27, 2005
67
INFORMATION PURSUANT TO PART IV OF SCHEDULE VI OF THE COMPANIES ACT,1956
Balance Sheet Abstract and Company’s General Business Profile
I.
Registration Details
Registration No.
Balance Sheet Date
II.
2 64 3 1
State Code
3 1 – 0 3 – 0 5
Date Month
Year
5 5
Capital Raised during the year (Amount in Rs. Thousands)
Public Issue
NIL
Bonus Issue
7 8 2 9 6
Rights Issue
NIL
Private Placement
NIL
III. Position of Moblisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liabilities
Total Assets
2 5 6 3 8 9 8
2 5 6 3 8 9 8
Sources of Funds
Paid - up Capital
Reserves & Surplus
2 3 4 8 8 9
1 5 0 6 0 7 3
Secured Loans
Unsecured Loans
4 9 6 1 8 1
2 0 6 2 9 0
Deferred Tax (Net)
1 2 0 4 6 5
68
Application of Funds
IV.
Net Fixed Assets
2 0 6 9 3 6 2
Net Current Assets
3 3 5 1 8 2
Accumulated Losses
NIL
Performance of the Company (Amount in Rs. Thousands)
Turnover
5 6 2 6 4 5 0
Profit/Loss before Tax
+
8 4 9 9 8 2
Earning per share in Rs.
2 . 6 4
V.
Generic Names of three principal products/services of the Company (as per monetary terms)
Product Description
Investments
1 5 9 3 5 4
Misc. Expenditure
N I L
Total Expenditure
4 7 7 6 4 6 8
Profit/Loss after Tax
+
6 2 0 9 4 4
Dividend Rate %
1 0 0 %
Item Code
Integrated Wiring
8 5 4 4 . 9 0
Rubber Components
4 0 1 6 0 0 0
PVC Insulated Wire
8 5 4 4 . 9 0
for and on behalf of the Board
V.C. SEHGAL
Chairman
Place : Noida
Date : May 27, 2005
A. YAMAUCHI
Whole time Director
PANKAJ MITAL
Chief Operating Officer
G.N. GAUBA
Co. Secretary & V.P. Finance
NA
NA
NA
Nil
Nil
NA
Nil
(Rs. 31,231)
(Rs. 172,080)
Nil
EURO 551
EURO 3,036
EURO 159
(Rs. 9,012)
525,000
100%
—
—
1
100%
—
—
EURO 1,934
(Rs. 109,619)
Equity Share of
EURO 1 each
31st March,
2005
MSSL
Mauritius
Holdings
Ltd.
Equity Share of
AED 150,000
equivalent to
EURO 46875
each
31st March,
2005
MSSL
Mideast
(FZE)
NA
NA
Nil
Nil
(Rs. (43,417)
EURO (766)
EURO (65)
(Rs. (3,684)
5,000
100%
—
—
Equity Share of
EURO 10 each,
100% held by
MSSL Mauritius
Holdings Limited
31st March,
2005
MSSL Ireland
Private
Limited
NA
NA
Nil
Nil
(Rs(680)
EURO (12)
EURO (26)
(Rs. (1,474)
1
100%
—
—
Equity Share of
EURO 35000
31st March,
2005
MSSL
Handels
GmbH
NA
NA
Nil
Nil
(Rs(6,522)
SR Rs. (14,837)
SR Rs. (36,384)
(Rs. (15,994)
Equity Share of
SR Rs. 10 each.
Preference share
of SR Rs. 10 each
Held by MSSL
Mideast (FZE)
1,456,202
100%
12,782,250
100%
31st March,
2005
Motherson
Electrical
Wires Lanka
(Pvt.) Ltd
(Rs(53)
SGD (2)
SGD (3)
(Rs. (79)
NA
NA
Nil
Nil
Place : Noida
MITAL
Chairman
MSSL
GB Ltd.
31st March,
2005
Equity Share of
GBP 1 each
100% shares
held by MSSL
Mideast (FZE)
1000
100%
—
—
31st March,
2005
Equity Share of
AED 100 each,
53.33% held by
MSSL Mauritius
Holdings Ltd.
800
53.33%
—
—
G.N. GAUBA
Whole time Director
V.C. SEHGAL
for and on behalf of the Board
Nil
EURO (246)
Nil
NA
NA
Nil
NA
NA
NA
NA
Nil
Nil
Nil
EURO (4)
(Rs.(227)
Chief Operating Officer
A. YAMAUCHI PANKAJ
Nil
Nil
(Rs(13,943)
GBP 4
(Rs. (331)
EURO (79)
(Rs. (4504)
Equity Share of
EURO 250,000
each 100%
shares Held
by MSSL
Midest (FZE)
1
100%
—
—
31st March,
2005
MSSL
GmbH
Name of the Subsidiary Companies
MSSL Hag
Tolings
Ltd.
(FZC)
(Figures in thousands)
100,000
100%
—
—
Equity Share of
SGD 1 each
31st March,
2005
MSSL (S)
Pte Ltd
* Note: Indian Rupee figures have been arrived at by applying the year end interbank exchange rate , EURO 1=Rs 56.68, SGD 1=Rs 26.49, SRILANKAN Rs. 1= Rs 0.4396, GBP 1=Rs 82.69
Material changes between the end of the
financial year of the subsidiary and that of
the Holding Company
Changes in the interest of the Holding
Company in the subsidiary between the end
of the financial year of the subsidiary and
that of the Holding Company
- Profits for the previous financial years of
the Subsidiary Companies since it became a
subsidiary of the Holding Company
- Profits of the Subsidiary Companies for the
financial year ended 31st March, 2005
Net aggregate amounts of profits/(losses)
of the Subsidiary Companies so far as those
profits are dealt with, or provision is made for
those losses in the Accounts of the Holding
Company
- Profits for the previous financial years of
the Subisidiary Companies since it became a
subsidiary of the Holding Company*
- Profits/Losses of the Subsidiary Companies
for the financial year ended March 31, 2005*
Net aggregate amount of profits/(losses) of
the Subsidiary Companies so far as it concerns
the members of the Holding Company and
is not dealt in the accounts of the Holding
Company.
- Equity (Nos.)
- Extent of Holding (%)
- Preference (Nos.)
- Extent of Holding (%)
Number of shares held
in the Subsidiary Company
as on above date:
The financial year of the
Subsidiary Companies ended on
Particulars
NA
NA
Nil
Nil
Rs. (3,327)
Rs. (203)
2,767,600
74%
1,076,565
74%
Equity Share
of Rs.10 each
Preferennce
Share of
Rs.10 each
31st March
2005
NA
NA
Nil
Nil
Rs. 3,520
Rs. (4,230)
1,403,226
56.13%
—
—
Equity Share
of Rs. 10 each
31st March
2005
Draexlmaier &
Motherson
Motherson
Pudenz
Electrical System Wickmann
India Ltd.
Ltd.
NA
NA
Nil
Nil
Nil
Rs.19,394
1,675,000
50.01%
—
Equity Share
of Rs. 10 each
31st March
2005
WOCO
Motherson
Elastomer
Ltd.
NA
NA
Nil
Nil
Nil
Rs. (821)
50,000
100%
—
Equity Share
of Rs. 10 each
31st March
2005
WOCO
Motherson
Advanced
Rubber
Technologies
Ltd.
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES
69
MSSL Mauritius
Holdings Limited
MSSL Ireland Pvt Limited
MSSL Handels GmbH
MSSL GB Limited
MSSL (S) Pte Limited
Motherson Electrical
Wires Pvt Limited
MSSL Hag Toolings
Limited (FZC)
Draexlmaier & Motherson
Electrical Systems (I) Limited
Motherson PUDENZ
WICKMANN Limited
WOCO Motherson
Elastomer Limited
2
3
4
5
6
7
9
Rs.
Rs.
Rs.
Rs.
@ Euro
Sri Lankan Rupee
# GBP
Singapore $
Euro
@ Euro
Euro
Euro
Reporting
Currency
56.68
0.4396
82.69
26.49
56.68
56.68
56.68
56.68
Exchange
rate
500
34,180
25,000
51,948
1,870
62,592
83
2,649
1,984
2,834
29,757
2,664
Capital
(821)
68,476
13,807
(4,223)
(22,389)
6,101
331
26
(2,154)
(47,101)
9,862
281,643
123
190,394
49,915
98,502
40,299
104,010
827
2,702
3,571
27,830
56,793
737,804
Reserves Total assets
123
190,394
49,915
98,502
40,299
104,010
827
2,702
3,571
27,830
56,793
737,804
-
-
-
-
-
-
-
-
-
4,648
71,077
Total Investments
Liabilities
-
342,449
66,092
216,674
29,927
172,040
-
-
15,700
-
786,152
Turnover
(821)
61,167
9,094
(925)
(18,445)
15,994
413
79
(1,474)
(3,684)
9,296
109,619
-
22,387
1,558
(1,198)
-
-
83
-
-
-
283
—
(821)
38,780
7,535
274
(8,445)
15,994
331
79
(1,474)
(3,684)
9,012
109,619
-
-
-
-
-
3,371
-
-
-
-
-
All figures in Thousands/Rs
Profit Provision Profit Proposed
before tax for tax after tax dividend
Notes :
1. As required under Para VI of the Approval dated 6th May, 2005 - issued by the Ministry of Companies Affairs, Indian rupees equivalents of the figures given in the foeign currencies in the accounts of subsidiary
companies has been given based on the exchange rates on 31-3-2005
2. @ Subsidiary of MSSL Mauritius Holdings Limited
12
11
10
WOCO Motherson Advanced
Rubber Technologies Limited
MSSL Mideast (FZE)
1
8
Name of the
Subsidiary Company
S.No
Statement pursuant to exemption received under Section 212 (8) of the Companies Act ,1956 relating to subsidiary companies
70
AUDITORS’ REPORT
To the Directors’ of
MOTHERSON SUMI SYSTEMS LIMITED
1.
We have audited the attached Consolidated Balance Sheet of Motherson Sumi Systems Limited and its subsidiaries, joint
ventures and associate as at March 31, 2005 the Consolidated Profit and Loss Account for the year ended on that date
annexed thereto, and the Consolidated Cash Flow Statement for the year ended on that date, which we have signed
under reference to this report. These consolidated financial statements are the responsibility of the management. Our
responsibility is to express an opinion on these consolidated financial statements based on our audit.
2.
We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are prepared, in
all material respects, in accordance with an identified financial reporting framework and are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
3.
We did not audit the financial statements of certain subsidiaries, joint ventures and associate, whose financial statements
reflect total assets of Rs. 1,462,678 thousand as at March 31, 2005 and total revenues of Rs. 2,557,576 thousand for the
year ended on that date. These financial statements have been audited by other auditors, whose reports have been
furnished to us and our opinion, insofar as it relates to the amounts included in respect of these subsidiaries, joint ventures
and associate, is based solely on the report of the other auditors.
4.
We report that the consolidated financial statements have been prepared by the company in accordance with the
requirements of Accounting Standard 21, Consolidated Financial Statements, issued by the Institute of Chartered
Accountants of India and on the basis of the separate audited financial statements of Motherson Sumi Systems Limited
and its subsidiaries, joint ventures and associate, included in the consolidated financial statements.
5.
On the basis of the information and explanations given to us and on consideration of the separate audit reports on
individual audited financial statements of Motherson Sumi Systems Limited and its aforesaid subsidiaries, joint ventures and
associate, in our opinion, the consolidated financial statements give a true and fair view in conformity with the accounting
principles generally accepted in India:
(a) in the case of the consolidated balance sheet, of the consolidated state of affairs of Motherson Sumi Systems Limited
and its subsidiaries as at March 31, 2005;
(b) in the case of the consolidated profit and loss account, of the consolidated results of operations of Motherson Sumi
Systems Limited and its subsidiaries for the year ended on that date; and
(c) in the case of the consolidated cash flow statement, of the consolidated cash flows of Motherson Sumi Systems
Limited and its subsidiaries for the year ended on that date.
KAUSHIK DUTTA
Partner
Membership No.: F88540
For and on behalf of
Place: Noida
Price Waterhouse
Date: May 27, 2005
Chartered
Accountants
71
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2005
Schedule
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital
Reserves & Surplus
72
I
II
Minority Interest
Capital
Reserves
Loan Funds
Secured Loans
Unsecured Loans
Deferred tax liability (net)
(Refer A(12) & B (7) on Schedule XIII)
TOTAL
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Capital Work in Progress
III
IV
V
Investments
Current Assets, Loans and Advances
Inventories
Sundry Debtors
Cash & Bank Balances
Loans & Advances
VI
VII
Less: Current Liabilities & Provisions
Current Liabilities
Provisions
VIII
NET CURRENT ASSETS
Miscellaneous Expenditure
(To the extent not written off or adjusted)
TOTAL
Significant Accounting Policies and
Notes forming part of the Accounts
This is the Consolidated Balance Sheet
referred to in our report of even date
KAUSHIK DUTTA
Partner
M. No.: F 88540
For and on behalf of Price Waterhouse
Chartered Accountants
Place: Noida
Date : May 27, 2005
IX
(Figures in Rs. thousands)
As at
March 31, 2005
As at
March 31, 2004
234,889
1,964,792
2,199,681
156,593
1,452,296
1,608,889
42,767
31,784
25,296
(3,965)
942,220
221,404
123,963
817,890
115,395
133,652
3,561,819
2,697,157
3,946,598
1,498,642
2,447,956
117,360
2,565,316
37,277
3,014,014
1,198,992
1,815,022
23,689
1,838,711
37,924
1,058,344
836,740
209,024
454,627
2,558,735
675,687
696,259
125,606
420,132
1,917,684
1,218,003
381,506
1,599,509
959,226
868,229
228,933
1,097,162
820,522
—
3,561,819
–
2,697,157
XIII
The schedules referred above form integral part of the Consolidated
Balance Sheet
for and on behalf of the Board
V.C. SEHGAL
Chairman
A. YAMAUCHI
Whole time Director
PANKAJ MITAL
Chief Operating Officer
G.N. GAUBA
Co. Secretary & V.P. Finance
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31,2005
(Figures in Rs. thousands)
Schedule
INCOME
Sale of Finished Goods (Gross)
Less: Excise duty
Sale of Finished Goods (Net)
Other Income
For the year ended For the year ended
March 31, 2005
March 31, 2004
X
TOTAL
EXPENDITURE
Manufacturing and other expenses
Depreciation & Amortisation
Interest (net)
Miscellaneous Expenditure written off
XI
XII
IX
TOTAL
Share of Profit in Associate (Refer A(2) & B (3B) on Schedule XIII)
Profit Before Taxation
Tax Expense
Provision for Current Income Tax
Provision for Deferred IncomeTax (Refer A (12) & B (7) on Schedule XIII)
Provision for Wealth Tax
Less: Income Tax for earlier years
Profit After Taxation
— Concern share
— Minority
Add: Balance brought forward from previous year
Surplus Available For Appropriation
APPROPRIATIONS
Transfer to General Reserve
Proposed Dividend
Tax on Dividend
Tax paid on Dividend by consolidated company
Balance Carried to Balance Sheet
TOTAL
Earning per share (Basic/Diluted) of face value
Re. 1/- each
(Refer B (6) on Schedule XIII)
Significant Accounting Policies and
XIII
Notes forming part of the Accounts
This is the Consolidated Profit & Loss Account
referred to in our report of even date
KAUSHIK DUTTA
Partner
M. No.: F 88540
For and on behalf of Price Waterhouse
Chartered Accountants
Place: Noida
Date : May 27, 2005
8,827,251
1,014,997
7,812,254
107,115
6,681,882
782,530
5,899,352
71,434
7,919,369
5,970,786
6,417,660
341,156
33,539
—
4,766,067
304,151
44,790
814
6,792,355
5,115,822
3,525
2,540
1,130,539
857,504
283,487
(9,689)
530
856,211
(2,083)
211,419
(3,877)
500
649,462
435
858,294
839,972
18,322
792,525
649,027
652,382
(3,355)
416,799
1,632,497
1,069,181
160,378
234,889
32,943
923
1,203,364
100,000
156,593
20,063
—
792,525
1,632,497
1,069,181
3.58
2.78
The schedules referred above form integral part of the
Consolidated Profit & Loss Account
for and on behalf of the Board
V.C. SEHGAL
Chairman
A. YAMAUCHI
Whole time Director
PANKAJ MITAL
Chief Operating Officer
G.N. GAUBA
Co. Secretary & V.P. Finance
73
CONSOLIDATED CASH FLOW STATEMENT
2004-2005
2003-2004
1,130,539
857,504
(3,525)
341,156
39,858
(6,319)
(883)
16,162
1,430
342
(1,318)
(27,097)
5,481
2,956
7,788
(283)
(2,540)
304,151
48,430
(3,640)
(80)
10,100
(6,866)
814
398
1,575
(8,419)
8,030
(883)
10,240
199
Operating profit before working capital changes
1,506.287
1,219,013
Adjustments for changes in working capital :
- (INCREASE)/DECREASE in Sundry Debtors
- (INCREASE)/DECREASE in Other Receivables
- (INCREASE)/DECREASE in Inventories
- INCREASE/(DECREASE) in Trade and Other Payables
Cash generated from operations
- Taxes (Paid)/Received (Net of TDS)
(139,616)
(78,722)
(382,659)
346,117
1,251,407
(221,475)
(225,312)
(271,660)
(213,997)
396,941
904,985
(184,198)
Net cash from operating activities
1,029,932
720,787
(1,029,246)
14,063
(31)
(16,162)
6,805
883
(71,020)
18,365
(672,535)
25,661
(10,081)
3,230
80
—
—
(1,005,323)
(724,665)
A. CASH FLOW FROM OPERATING ACTIVITIES
Net (loss)/profit before tax
Adjustments for:
Share of Profit in Associate
Depreciation
Interest Expense
Interest Income
Income from Investment - Dividends
Lease Rent
(Profit)/Loss on Fixed Assets sold
Miscellaneous Expenditure written off
Debts / Advances Written off
Provision for Bad & Doubtful Debts / Advances
Liability no longer required written back
Provision for Gratuity & Leave Encashment
Provision for diminution in value of Investments
Unrealised foreign exchange (gain) /loss
Provision for warranty
74
(Figures in Rs. thousands)
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets Including CWIP
- Addition During the year
Proceeds from Sale of fixed assets
Purchase of investments
Lease Rent Payment
Interest Received (Revenue)
Dividend Received
Loan advanced
Loan received back
Net cash used in investing activities
(Figures in Rs. thousands)
2004-2005
C. CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from minority Share holders’
Proceeds from long term borrowings
Receipts
Payments
Proceeds from short term borrowings
Receipts
Payments
Proceeds from Cash Credits (net)
Finance Lease Rent (interest part only)
Interest Paid
Dividend Paid
Dividend Tax Paid
Net cash used in financing activities
Net Increase/(Decrease) in Cash & Cash Equivalents
Cash and cash equivalents as at March 31 , 2004
Cash and cash equivalents as at March 31 , 2005
Cash and cash equivalents comprise
Cash In Hand
Cheque In Hand
Deposit Account
Balance with Banks
Total Cash and cash equivalents
Cash and Cash Equivalents include :
Cash & bank balances
Net Unrealised Loss on Foreign Currency Cash & Equivalents
2003-2004
52,290
—
296,687
(179,094)
459,429
(274,797)
100,000
(986)
5,088
(38,881)
(156,088)
(20,063)
58,953
83,562
125,606
13,835
(60,572)
53,167
(98)
(49,777)
(117,268)
(15,048)
8,871
4,993
121,126
209,168
126,119
3,647
3,210
43,807
158,360
209,024
3,366
4,036
12,115
106,089
125,606
209,024
144
209,168
125,606
513
126,119
(I)
The above Cash Flow Statement has been prepared under the Indirect Method as set out in the Accounting Standard
- 3 on Cash Flow Statement issued by the Institute of Chartered Accountant of India.
(ii)
Previous year’s figures have been regrouped wherever necessary to conform to the current year’s classification.
(iii)
Following non cash transactions have not been considered in the cash flow statement :
Tax deducted at source on income
(iv)
Figures in brackets indicate cash outgo.
This is the Consolidated Cash Flow Statement
referred to in our report of even date
KAUSHIK DUTTA
Partner
M.No.: F 88540
For and on behalf of Price Waterhouse
Chartered Accountants
Place: Noida
Date : May 27, 2005
for and on behalf of the Board
V.C. SEHGAL
Chairman
A. YAMAUCHI
Whole time Director
PANKAJ MITAL
Chief Operating Officer
G.N. GAUBA
Co. Secretary & V.P. Finance
75
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET
SCHEDULE I
SHARE CAPITAL*
(Figures in Rs. thousands)
As at
March 31, 2005
As at
March 31, 2004
Authorised
300,000,000 Equity Shares of Rs. 1/- each
(Previous Year 200,000,000 Equity Shares of Rs. 1/- each)
300,000
200,000
Issued
234,892,400 Equity Shares of Rs. 1/- each
(Previous Year 156,596,000 Equity Shares of Rs. 1/- each)
234,892
156,596
234,889
156,593
234,889
156,593
Subscribed and Paid up
234,889,200 Equity Shares of Rs. 1/- each
(Previous Year 156,592,800 Equity Shares of Rs. 1/- each)
(Of the above shares 6,090,000 (6,090,000) shares are allotted as fully paid
up pursuant to a contract for consideration other than cash)
(Of the above shares 165,292,400 (86,996,000) shares are allotted as fully paid
bonus shares by way of capitalisation of share premium & general reserve).
76
TOTAL
Note :
*During the year the company has made allotment of 78,296,400 equity shares of Re. 1/- each as bonus shares in proportion of one equity
share for every two equity shares. The credit of bonus shares have been given to respective beneficiary accounts of the shareholders by
the depository
SCHEDULE II
(Figures in Rs. thousands)
As at
March 31, 2005
Revaluation Reserve
As per Last Balance Sheet
Additions during the year
Deductions during the year
20,032
—
—
Reserve on amalgamation
(Refer B(10) on Schedule XIII)
As per Last Balance Sheet
Additions during the year
Deductions during the year
80,352
—
—
Securities Premium Account
As per Last Balance Sheet
Additions during the year
Deductions during the year*
55,278
—
55,278
As at
March 31, 2004
20,032
20,032
—
—
20,032
80,352
80,352
—
—
80,352
—
55,278
—
—
55,278
(Figures in Rs. thousands)
As at
March 31, 2005
General Reserve
As per Last Balance Sheet
Additions during the year
Deductions during the year*
480,428
160,378
23,018
Exchange Reserve on Consolidation
(Refer A(9) on Schedule XIII)
As per Last Balance Sheet
Additions during the year
Deductions during the year
(6,238)
2,141
—
Capital Reserve on Consolidation
(Refer A(2) on Schedule XIII)
As per Last Balance Sheet
Additions during the year
Deductions during the year
29,919
17,434
—
Profit and Loss Account
As per Last Balance Sheet
Additions during the year
Deductions during the year
792,525
571,217
160,378
TOTAL
* Utilised for capitalisation by way of bonus shares (Refer note on Schedule 1)
As at
March 31, 2004
617,788
380,428
100,000
—
480,428
(4,097)
(746)
(5,492)
—
(6,238)
47,353
29,919
—
—
29,919
1,203,364
416,799
475,726
100,000
792,525
1,964,792
1,452,296
77
SCHEDULE III
SECURED LOANS
(Figures in Rs. thousands)
1
Short Term Loans
(i) From Banks*
— Rupee Loan
— Foreign currency Loan
(ii) From Others**
— Rupee Loan
2
Long Term Loans#
(i) From Banks***
— Rupee Loan
— Foreign currency Loan
(ii)
78
From Others****
— Rupee Loan
— Foreign currency Loan
TOTAL
As at
March 31, 2005
As at
March 31, 2004
191,901
90,953
241,373
45,120
8,726
—
36,883
371,262
19,637
397,084
77,572
164,923
114,676
—
942,220
817,890
Secured Loans referred above are :
* Rs. 26,820 thousand is secured against hypothecation of stocks and book debts, a guarantee from promoters of the
company of Kyungshin Industrial Motherson Limited, Rs. 21,077 thousand is secured by hypothecation over plant &
machinery, inventories, stocks and a corporate guarantee from promoters of the company of Motherson Electrical
Wires Lanka Private Limited, Rs. 8,119 thousand secured by first charge by way of hypothecation of all current assets
including present and future stocks, book debts and other specified moveable assets of Woco Motherson Elastomer
Limited and first charge on entire fixed assets of the company present & future, balance secured by first charge by way
of hypothecation of all present and future stocks, book debts and other specified moveable assets of the Company .
** Rs. 8,726 thousand secured by hypothecation of specific moulds, tools & dies of Schefenacker Motherson Limited used
for production of components.
*** Rs. 415 thousand secured by way of hypothecation of specific vehicles of Schefenacker Motherson Limited, Rs. 36,468
thousand is secured against fixed assets, a guarantee from promoters of the company of Kyungshin Industrial Motherson
Limited, Rs. 5,391 thousand is secured by hypothecation over plant & machinery, inventories, stocks and a corporate
guarantee from promoters of the company of Motherson Electrical Wires Lanka Private Limited and balance secured
by first pari-passu charge on entire fixed assets both moveable & immoveable of the company present & future, these
are also secured by way of deposit of title deeds of specified properties, further Rs. 269,342 thousand are also secured
by second pari-passu charge on the entire current assets of the company.
**** Rs. 77,572 thousand secured by hypothecation of specific moulds, tools & dies used for production of components and
Rs. 164,923 thousand secured by way of corporate guarantee given by shareholder of MSSL Mideast (FZE).
# Long terms loans due within a Year are Rs. 96,395 thousand (Previous Year Rs. 138,168 thousand).
SCHEDULE IV
UNSECURED LOANS
(Figures in Rs. thousands)
As at
March 31, 2005
As at
March 31, 2004
100,000
32,400
—
986
6,000
83,004
38,269
76,140
221,404
115,395
Short Term Loans
— Privately Placed debentures*
— Other than Banks**
Long Term Loans#
From Other than Banks
— Rupee Loan
— Foreign currency Loan
TOTAL
*
Reedemable on May 13,2005 . Further the debentures amounting to Rs 50,000 thousand have put / call option at any
time from seven days of issue.
** Repayable on demand
# Long Term Loan due within a Year Rs. 73,890 thousand (Previous Year Rs. 32,400 thousand)
SCHEDULE V
FIXED ASSETS
79
(Figures in Rs. thousands)
(Refer A(3), A(4) on Schedule XIII)
GROSS BLOCK
Particulars
As at
March 31,
2004
Additions
during
the
year
Leasehold Land
Freehold Land
Leasehold improvements
Building
Plant & machinery
Furniture, fixtures &
Office equipments*
Computers
Vehicles**
Technical Knowhow fees
Business & Commercial Rights
60,574
37,050
31,255
465,561
2,079,156
162,891
49,495
21,605
274,417
383,706
108,672
103,371
101,294
22,581
4,500
TOTAL
Previous Year
3,014,014
2,437,492
Deletions/
Sale/
Adjustments
DEPRECIATION
Exchange
Translation
Adjustment
Total
as at
March 31,
2005
Upto
March 31,
2004
—
—
662
1,48
11,985
—
—
69
3,259
1,122
223,465
86,545
52,267
741,752
2,451,999
2,094
—
11,287
61,536
957,867
2,216
—
9,553
19,704
247,890
—
—
661
85
3,648
19,298
23,458
45,654
3,390
—
3,055
1,649
10,686
22,544
4,500
301
131
352
2
—
125,216
125,311
136,614
3,429
—
27,263
71,045
42,198
21,421
4,281
11,179
19,822
26,771
2,554
219
983,914
623,102
56,566
42,772
5,236
(3,808)
3,946,598
3,014,014
1,198,992
920,816
339,908
302,903
Capital Work in Progress
* Includes Rs. Nil (Previous Year Rs. 225 thousand) in respect of office equipment held under finance lease.
** Includes Rs. 296 thousand (Previous Year Rs. 843 thousand) in respect of Vehicles acquired under finance lease.
Depreciation
for the
year
Depreciation on
deletions/
sale/
Adjustment
NET BLOCK
Exchange
Translation
Adjustment
Upto
March 31,
2005
As at
March 31,
2005
As at
March 31,
2004
—
—
1
103
438
4,310
—
20,180
81,258
1,202,547
219,155
86,545
32,087
660,494
1,249,452
58,480
37,050
19,968
404,025
1,121,289
307
1,104
8,227
22,544
4,500
136
45
95
—
—
38,271
89,808
60,837
1,431
—
86,945
35,503
75,777
1,998
—
81,409
32,326
59,096
1,160
219
41,076
23,976
818
(751)
1,498,642
1,198,992
2,447,956
1,815,022
117,360
23,689
2,565,316
1,838,711
SCHEDULE VI
INVESTMENTS
(Refer A(5) on Schedule XIII)
(Figures in Rs. thousands)
As at
March 31, 2005
As at
March 31, 2004
6,239
3,744
2,495
3,743
12,004
3,525
15,529
12,004
15,006
18,368
4,247
3,809
37,277
37,924
Long-term Investments
1. In Associate
Saks Ancilliaries Limited
- Goodwill
On Consolidation
Less : Amortisation
- Net Assets Value
On Consolidation
Share of Profit in Associate
2. In Others
Short Term Investments
TOTAL
80
SCHEDULE VII
CURRENT ASSETS, LOANS AND ADVANCES
A. Current Assets
1. Stock in Trade
(Refer A(6) on Schedule XIII)
(i) Finished Goods
(ii) Work in Progress
(iii) Raw Material & Components
(iv) Goods in Transit(Raw Material & Components)
(v) Store & Spares
TOTAL (I)
2. Sundry Debtors
(Unsecured, unless otherwise stated)
(i) Outstanding for more than six months
Considered Good
Considered Doubtful
Less : Provision for doubtful debts
(Figures in Rs. thousands)
As at
March 31, 2005
As at
March 31, 2004
271,895
140,645
509,817
111,195
24,792
1,058,344
128,614
113,079
342,118
83,718
8,158
675,687
8,762
6,116
14,878
6,116
8,762
1,449
5,412
6,861
5,412
1,449
SCHEDULE VII (CONTD.)
CURRENT ASSETS, LOANS AND ADVANCES
(ii) Other Debts
Considered good
Considered Doubtful
Less : Provision for doubtful debts
TOTAL (2)
3. Cash and Bank Balances
(i) Cash in hand
(ii) Cheques in hand
(iii) Balance with Banks in
(a) Current Accounts
(b) Deposit account*
(c) Dividend Account
TOTAL (3)
TOTAL A (1+2+3)
B. Loans and Advances
(Unsecured, unless otherwise stated)
(i) Advances recoverable in cash or in kind
or for value to be received **
Considered good
Considered doubtful
(Figures in Rs. thousands)
As at
March 31, 2005
As at
March 31, 2004
827,978
2,811
694,810
4,186
830,789
2,811
827,978
836,740
698,996
4,186
694,810
696,259
3,647
3,210
3,366
4,036
155,997
43,807
2,363
104,261
12,115
1,828
209,024
125,606
2,104,108
1,497,552
81
296,557
4,750
328,166
5,397
Less : Provision for doubtful advances
301,307
4,750
333,563
5,397
(ii) Deposits with Excise, Customs & Govt Authorities
296,557
158,070
328,166
91,966
454,627
420,132
2,558,735
1,917,684
TOTAL B
GRAND TOTAL (A+B)
*
Includes Deposits pledged with Excise, Sales Tax & Custom authorities Rs. 955 thousand ( Previous Year Rs. 30 thousand)
and margin money Rs. 2,560 thousand (Previous Year Rs. 2,796 thousand)
** Includes capital advances of Rs. 67,843 thousand (Previous Year Rs. 89,173 thousand)
SCHEDULE VIII
CURRENT LIABILITIES AND PROVISIONS
(Figures in Rs. thousands)
As at
March 31, 2005
As at
March 31, 2004
23,480
939,274
129,806
120,585
2,364
2,494
13,424
711,284
45,010
95,135
1,860
1,516
1,218,003
868,229
267,832
530
88,272
21,878
2,994
176,656
1,500
31,103
16,397
3,277
381,506
228,933
1,599,509
1,097,162
A. Current Liabilities
(i) Sundry Creditors
Small Scale Industrial Undertakings
Others
(ii) Advance from customers
(iii) Other Liabilities
(iv) Investor Education & Protection Fund
(v) Interest Accrued but not due
B. Provisions
(Refer A(7), A(12) & B(8) on Schedule XIII)
(i) For Dividend (including tax thereon)
(ii) For Wealth tax
(iii) For Income tax (net)*
(iv) For Employee Benefit
(v) For Warranty
82
TOTAL
* Net of Advance tax Rs. 524,659 thousand (Previous Year Rs.319,200 thousand)
SCHEDULE IX
MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
(i) Deferred Revenue Expenses
Less: Written off during the year
(ii) Preliminary Expenses
Less: Written off during the year
TOTAL (i+ii)
As at
March 31, 2005
As at
March 31, 2004
—
—
—
—
—
—
780
780
—
34
34
—
—
—
SCHEDULE X
OTHER INCOME
(Figures in Rs. thousands)
For the year ended For the year ended
March 31, 2005
March 31, 2004
1) Other Income
(a) Dividend Received*
- From Others
(b) Rent
(c) Change in carrying amount of current investments
(d) Service Income
(e) Sundries written back
(f) Miscellaneous Income
(g) Exchange fluctuation(net)
(h) Profit on sale of Fixed assets
TOTAL
Tax deducted on source
(a) Rent
(b) Misc.Income
* Includes dividend from
Short term Non-Trade investments
883
8,562
—
9,227
27,097
32,403
28,943
—
80
8,232
883
8,663
8,419
31,640
6,651
6,866
107,115
71,434
2,699
963
1,687
918
883
80
SCHEDULE XI
COST OF MATERIALS AND
MANUFACTURING & OTHER EXPENSES
(Figures in Rs. thousands)
For the year ended For the year ended
March 31, 2005
March 31, 2004
Materials consumed
Opening Stock
Raw materials
Work-in-progress
Finished goods
Increase in opening stock on account of early adoption of
the revised provision of AS-27
Raw materials
Work-in-progress
Finished goods
Add :Purchases of Raw materials
Less : Closing Stock
Raw materials
Work-in-progress
Finished goods
342,118
113,079
128,614
248,919
67,253
88,714
—
—
—
583,811
3,706
780
442
409,814
4,615,197
3,318,518
(509,817)
(140,645)
(271,895)
(922,357)
(342,118)
(113,079)
(128,614)
(583,811)
83
SCHEDULE XI (CONTD.)
COST OF MATERIALS AND
MANUFACTURING & OTHER EXPENSES
84
Total consumption for goods sold
Salary, wages, bonus etc
Contribution to Provident & Other Fund
Staff Welfare
Electricity, Water and Fuel
Repairs and Maintenance :
Machinery
Building
Others
Consumption of Store and Spare parts
Conversion charges
Lease rent (Refer A(11) & B(9) on Schedule XIII)
Rent
Rates & taxes
Insurance
Donation
Travelling
Freight & forwarding
Royalty
Cash Discount
Commission
Loss on sale of fixed assets(net)
Provision for dimunition in value of Short Term Investments
Bad Debts / Advances written off
Doubtful Debts/ Advances
Legal & professional expenses
Miscellaneous expenses
TOTAL
SCHEDULE XII
INTEREST (NET)
Interest Expense
- Privately Placed Debentures
- Fixed loans
- Others
Less : Interest Income (Gross)
- From Bank Deposits
- From Income Tax Refund
- From Others
TOTAL
Tax deducted on source
Interest Income Others
(Figures in Rs. thousands)
For the year ended For the year ended
March 31, 2005
March 31, 2004
4,276,651
552,256
46,997
91,800
167,113
3,144,521
403,760
39,610
66,870
127,398
79,869
49,639
63,123
106,467
116,945
16,162
70,198
9,208
26,056
5,501
138,935
130,978
45,297
14,465
1,257
1,430
2,956
342
—
152,731
251,284
76,114
35,220
59,774
78,691
99,712
10,100
52,872
9,836
20,250
3,189
113,033
76,411
35,108
12,421
3,409
—
—
398
1,575
88,488
207,307
6,417,660
4,766,067
(Figures in Rs. thousands)
For the year ended For the year ended
March 31, 2005
March 31, 2004
3,678
23,478
12,702
—
32,906
15,524
388
1,452
4,479
506
—
3,134
33,539
44,790
598
169
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS
SCHEDULE XIII
SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE CONSOLIDATED
ACCOUNTS
A. SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Accounting
The Financial Statements are prepared under the historical cost convention as modified to include revaluation of
certain fixed assets as indicated in (3) below, in accordance with applicable Accounting Standards issued by the
Institute of Chartered Accountants of India and relevant presentational requirements of the Companies Act, 1956.
2. Principles of Consolidation
The Consolidated Financial Statements relate to Financial Statements of Motherson Sumi Systems Limited (‘the
Company’) and it’s Subsidiary Companies, Joint Ventures and Associates (‘the Group’).
The consolidated financial statements have been prepared on the following basis:
a) Subsidiaries
-
The subsidiaries have been consolidated by applying Accounting Standard 21 “Consolidated Financial
Statements”.
-
Subsidiaries are consolidated from the date on which effective control is transferred to the Group and are
no longer consolidated from the date of disposal.
-
The financial statements of the company & its Subsidiary Companies have been combined on a line-by-line
basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully
eliminating intra-group balances & intra-group transactions resulting in unrealized profits or losses.
-
The excess of the Company’s portion of equity and reserves of the Subsidiary Company as at the time of
its investment is recognized in the financial statements as Capital Reserve.
b) Investments in business entities over which the Company exercises joint control and the company does not hold
majority voting power are accounted for using proportionate consolidation in accordance with Accounting
Standard 27 “Financial Reporting of Interest in Joint Venture”.
c)
Investments in Associates (entity over which the Company exercises significant influence, which is neither a
subsidiary nor a joint venture) are accounted for using the equity method in accordance with Accounting Standard
23 “Accounting for Investments in Associates in Consolidated Financial Statements”.
The consolidated financial statements have been prepared using uniform accounting policies for like transactions
and other events in similar circumstances and are presented to the extent possible, in the same manner as the
Company’s separate financial statements.
3. Fixed Assets
i)
The fixed assets except as stated in (ii) below are stated at cost less accumulated depreciation. Cost of acquisition
or construction is inclusive of inward freight, duties and taxes and other incidental expenses.
ii)
The fixed assets of the Component Division of erstwhile Motherson Auto Components Engineering Limited
(MACE) have been stated at an amount inclusive of appreciation arising on revaluation of the assets by an
approved valuer on December 31, 1998. The method adopted for revaluation of the assets are as under:
a)
Land: Prevailing market rate of land as on the date of revaluation.
b) Buildings, Indigenous Plant and Machinery, Furniture and Fixtures, Moulds and Dies : Replacement value.
c)
Vehicles: Current price of the vehicles and reducing depreciation for the numbers of years of use and also
considering the value in secondary car market.
d) Air conditioning and Electrical Equipment: Present value of the assets taking into consideration the original
cost and price inflation index.
85
The Company charges assets Costing less than Rs 5,000 to expense, which could otherwise have been included
as Fixed Asset, because the amount is not material in accordance with ‘ Accounting Standard 10– Accounting
for Fixed Assets’
4. Depreciation
i)
Depreciation on fixed assets except as stated below, is provided from the month the asset is ready for commercial
production on a pro-rata basis at the SLM rates prescribed in schedule XIV to the Companies Act, 1956 or
based on useful life, whichever is higher. The following assets are amortized, on the straight line method over a
period of their estimated useful lives, at rates higher than those prescribed in schedule XIV of the Companies
Act, 1956:
Rates (%)
Computers
33.33
Vehicles
25
Plant & Machinery (Racks, Stands & Trolleys)
100
Specific Identified Plant & Machinery
25
ii)
In respect of revalued assets, depreciation is being provided on the revalued amounts over the remaining useful
life of the assets at the SLM rates. Leasehold Land is amortised over the balance period of lease.
iii) Technical Know How fees paid to a foreign collaborator by erstwhile Elastomer Division is being depreciated
on a straight line basis over the remaining tenure of the agreement.
iv) The amount paid for business and commercial rights by the erstwhile Elastomer Division is being depreciated
over the remaining tenure of agreement.
5. Investments
86
Investments other than subsidiaries, joint ventures and associates, which are accounted for separately as per 2 above,
are classified into long term and current investments. Long term investments are stated at cost. A provision for
diminution is made to recognise a decline, other than temporary, in the value of long term investments.
Current investments are carried at lower of cost and fair value. Fair value in the case of quoted investments refers
to the market value of the investments arrived at on the basis of last traded prices as at the year-end.
6. Inventory
Stores and spares, loose tools are valued at cost or net realisable value, whichever is lower.
Raw materials, components, finished goods and work in progress are valued at cost or net realisable value, whichever
is lower. The basis of determining cost for various categories of inventories are as follows:
i) Stores and Spares, Raw Materials and
First in First Out (FIFO) method
Components
ii) Work in Progress and Finished Goods
Material cost plus appropriate share of labour and production
overheads.
iii) Tools
Cost less amortisation based on useful life of the items
ascertained on a technical estimate by the management.
7. Retirement Benefits
In respect of the companies incorporated in India, the Group makes defined contribution for provident fund, family
pension fund and superannuation fund and the same are charged to the profit and loss account as incurred. In respect
of Gratuity, which is funded through a LIC group gratuity scheme, the Groups liability at the year-end is determined by
an actuarial valuation done at year-end and shortfall/surplus over the amount contributed to the scheme is charged
off to the profit and loss account or treated as prepaid, as the case may be.
In respect of the companies incorporated outside India, where applicable the companies makes defined contribution
on a monthly basis towards retirement benefit plans. Provision for Leave Encashment is made on the basis of actuarial
valuation done at the year-end.
8. Revenue Recognition
Sales are recognised upon the transfer of significant risks and rewards of ownership to the customers.
9. Foreign Exchange Transactions
Transactions involving foreign currencies are recorded at the exchange rate prevailing on the transaction date. Foreign
currency monetary items are translated at the exchange rate prevailing at the balance sheet date and the gain/loss
arising on such translation other than monetary items related to acquisition of fixed assets is credited / charges to
profit and loss account. The gain / loss arising on translation of monetary items related to acquisition of fixed assets
are adjusted to the cost of fixed assets. Premium or discount arising at the inception of a forward exchange contract
is amortised as expense or income over the life of contract.
For the purpose of consolidation, the Company has translated Assets and Liabilities of subsidiaries outside India at
the year-end exchange rate and Income and Expenditure items at an average exchange rate that approximates to
the exchange rate prevailing on the date of transaction.The resultant translation adjustment is reflected as a separate
component of Shareholders’ funds as “ Exchange Reserve on Consolidation”.
10. Borrowing Costs
The borrowing costs on funds other than those directly attributable to the acquisition of a qualifying asset i.e. an
asset that necessarily takes a substantial period of time to get ready for its intended use, are charged to revenue in
the period in which they are incurred.
The borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets
are capitalised as part of the cost of that asset.
11. Leases
Lease rental in respect of operating lease arrangements are charged to expense when due as per the terms of the
related agreement on a straight line basis.
Lease rentals in respect of finance lease transactions entered into prior to 31st March 2001 is charged to expense
when due as per the terms of the related agreement. Finance lease transactions entered into after this date are
considered as financing arrangements in accordance with Accounting Standard 19 and the leased asset is capitalized
at an amount equal to the present value of future lease payments and a corresponding amount is recognized as a
liability. The lease payments made are apportioned between finance charge and reduction of outstanding liability in
relation to leased asset.
12. Taxation
Current Tax
Current tax is provided on the basis of tax payable on estimated taxable income computed in accordance with the
applicable provisions after considering the tax allowances & exemptions.
Deferred Taxes
In accordance with Accounting Standard 22 – Accounting for Taxes on Income, issued by the Institute of Chartered
Accountants of India, the deferred tax for timing differences between the book and tax profits for the year is accounted
for using the tax rates and laws that have been enacted or substantially enacted as of the balance sheet date.
Deferred Tax Assets arising from temporary timing differences are recognised to the extent there is reasonable
certainty that the assets can be realised in future.
87
B. NOTES TO THE ACCOUNTS
1. Contingent Liabilities :
a)
b)
c)
d)
e)
f)
g)
h)
i)
(Rs. in thousands)
As at
March 31, 2005
As at
March 31, 2004
25,884
145
5,104
4,361
3,608
893
11,400
23,288
107
3,818
6,507
4,742
1,331
4,332
97,500
41,551
79,355
42,719
In respect of Excise *
In respect of Entry Tax
In respect of Sales Tax
In respect of Service Tax
In respect of Stamp Duty
In respect of Income Tax
In respect of Labour Cases
The Company has given corporate guarantee in respect of: **
a) Joint Ventures
Bank Guarantees furnished by the company
* Excludes interest.
** Actual amount outstanding
Joint Ventures
Rs. 141,528 thousand (Rs. 65,900 thousand)
2. Outstanding Capital Commitments :
(Rs. in thousands)
As at
March 31, 2005
As at
March 31, 2004
344,168
—
339,775
28
Unexpired amount of the contracts on capital
accounts and not provided for (net of advance)
Outstanding Lease Commitments
88
3.
Consolidation:
A. Details of Motherson Sumi Systems Limited subsidiaries which have been considered in these consolidated
accounts are as follows:
Name of the Company
MSSL Mauritius Holdings Limited
MSSL Mideast (FZE)
Motherson Electrical Wires Lanka Pvt. Ltd.
MSSL Handels GmbH
MSSL (S) Pte Ltd.
Motherson PUDENZ WICKMANN Limited
Draexlmaier & Motherson Electrical Systems India Limited
WOCO Motherson Elastomers Limited
WOCO Motherson Advanced Rubber Technologies Ltd.
MSSL GmbH
MSSL (GB) Limited
MSSL Ireland Private Limited (through MSSL
Mauritius Holdings Limited)
MSSL Hag Toolings Ltd. (FZC) (through MSSL
Mauritius Holdings Limited)
Country of
Incorporation
% Voting power held As at
31st March, 2005
Mauritius
UAE
Srilanka
Austria
Singapore
India
India
India
India
Germany
U.K.
100%
100%
100%
100%
100%
56.13%
74%
50.01%
100%
100%
100%
Ireland
100%
UAE
53.33%
B. Details of Associate Company are as follows:
Name of the Company
SAKS Ancillaries Limited
Country of
Incorporation
% Voting power held As at
31st March, 2005
India
40.01%
C. Details of Joint Venture Companies which have been considered in these consolidated accounts are as follows:
Name of the Company
Schefenacker Motherson Limited
Kyungshin Industrial Motherson limited
WOCO Motherson Limited (FZC) (through
MSSL Mauritius Holdings Limited)
Country of
Incorporation
% Voting
Reporting Dates
power held
used for
As at 31st March, 2005 Consolidation
India
India
49%
50%
31st December 2004
31st March 2005
UAE
33.33%
31st December 2004
4. Payment to the Company’s Auditors (including service tax) :
a)
b)
c)
d)
Statutory Audit Fee
Reimbursement of Expenses
Taxation Matters
Others
TOTAL
(Rs. in thousands)
For the year ended
March 31, 2005
For the year ended
March 31, 2004
5,781
391
293
801
6,004
285
327
3,338
7,266
9,954
5. The Company has entered into a Joint Venture Agreement with WOCO Franz Josef Wolf Holding GmbH & WOCO
Industrieteknik GmbH on May 16, 2004 to establish a new Joint venture entity and transfer its existing Elastomer
business as a going concern comprising of all fixed assets (excluding Land & Building), inventories, other current
assets, accruals and liabilities having following book values as at May 31, 2004, at an agreed sale price of Rs. 123,094
thousand:
(Rs. in thousands)
Fixed Assets (Excluding Land and Building)
Current Assets:
Cash & Bank
Inventories
Debtors
Advances recoverable in cash or in kind
Total
Current Liabilities:
Sundry Creditors
Other Liabilities
Total
Total (A) + (B) – (C)
(A)
68,950
(B)
11,572
42,027
39,748
3,633
96,980
(C)
34,654
581
35,235
130,695
Pursuant to the above agreement, a company, Woco Motherson Elastomer Ltd. (WMEL) was incorporated on
March 16, 2004. During the year, the company has subscribed to 1,675,000 equity shares of Rs 10/- each at par being
50.01% of equity share capital of WMEL. Balance 49.99% of equity share capital & 100% of preference share capital of
Rs. 10/- each was subscribed by the joint venture partner at a premium of Rs. 20/- per share. The excess of our share in
the net worth of the Company over our cost of investment amounting to Rs. 17,434 thousand has been accounted for
as Capital Reserve in Consolidated Financial Statements.
89
6. Earnings per share
For the year ended
March 31, 2005
For the year ended
March 31, 2004
234,889,200
234,889,200 *
839,972
652,382
3.58
2.78
Weighted Average number of Equity Shares of
Re. 1 /- each
outstanding at the end of the year
Net profit after tax available for equity
Shareholders (Rs in thousand)
Basic/ Diluted Earnings (in Rupees) Per Share of
Re. 1/- each. (Previous Year Rs. 1/- each )
*Adjusted consequent to the issue of equity shares of 78,296,400 as bonus shares during the current year in proportion
of one equity share for every two equity shares.
7. Deferred Tax
(i) The break up of net deferred tax liability as at 31 March, 2005 is as under:
(Rs. in thousands)
For the year ended
March 31, 2005
Timing differences
on account of:
90
Deferred
Tax Assets
Depreciation
Provision for Diminution in Investments
Debtors/Loans & Advances
Employee Benefits
Miscellaneous Expenditure
Carried Forward losses/unabsorbed depreciation
Total
For the year ended
March 31, 2004
Deferred Charge/
Tax Liability (Credit)
Deferred
Deferred
Tax Assets Tax Liability
—
1,017
3,922
3,546
761
9,543
142,752
—
—
—
—
—
(8,890)
(606)
416
(608)
715
(716)
—
411
4,338
2,938
1,476
8,827
151,642
—
—
—
—
—
18,789
142,752
(9,689)
17,990
151,642
Net Deferred Tax Liability
123,963
133,652
(ii) In view of the Company’s past financial performance and future profit projections, the company expects to fully
recover the Deferred Tax Assets.
8. The company has the following provision in the books of accounts as on March 31,2005 :
Description
Warranty
Balance as
Additions
Utilised/
Balance
On
during
Reversed
as on
01.04.2004
year
during year
31.03.2005
3,277
595
878
2,994
Warranty provision relate to the estimated outflow in respect of warranty for products sold by the company. Due
to the very nature of such costs, it is not possible to estimate the timing / uncertainties relating to the outflows of
economic benefits.
9. Leases
Lease payment made under cancelable operating leases have been recognized as an expense in the Profit and Loss
Account. The Company has not entered into any non-cancelable operating lease. In respect of finance lease entered
into by the company during the year minimum lease payment outstanding and their present value at balance sheet
date is as under:
a. For Vehicles
Particulars
Due within one year
Due within 2 to 5 years
Minimum Lease
payments
Current Previous
Year
Year
40
559
10
—
Finance
Charges
Current Previous
Year
Year
14
34
4
—
(Rs. in thousands)
Present value of
Lease payments
Current
Previous
Year
Year
26
525
6
—
Minimum Lease
payments
Current Previous
Year
Year
Finance
Charges
Current Previous
Year
Year
(Rs. in thousands)
Present value of
Lease payments
Current
Previous
Year
Year
b. For Office Equipments
Particulars
Due within one year
—
180
—
36
—
144
The Company has the option to buy back the assets at the end of the Finance Lease Agreements.
10. Reserve on Amalgamation
The “Reserve on Amalgamation” was created during the financial year 2001-2002 on the amalgamation of erstwhile
Motherson Sumi Electric Wires Limited (MSEW) and erstwhile Motherson Automotive Technologies and Engineering
Limited (MATE) with the company. The reserve amounting to Rs 80,352 thousand is in the nature of a free
reserve.
11. Related Party Disclosures
Related party disclosures, as required by AS18, “Related Party Disclosures”, are given below:
I.
Relationships where control exists:
a. Joint Ventures:
Kyungshin Industrial Motherson Limited
Schefenacker Motherson Limited
WOCO Motherson Limited (FZC)
b. Associate Companies:
Saks Ancillaries Limited
c. Key Management Personnel:
i)
Board of Directors:
Mr. V.C. Sehgal
Mr. Toshimi Shirakawa
Mr. M S Gujral
Mr. R Ganapati
Mr. Bimal Dhar
Mr. H Murai
Mr. A Yamauchi
Mr. M Matsushita
Maj. Gen Amarjit Singh (Retd)
Mr. Pankaj Mital
91
ii) Other Key Management Personnel:
Mr. Vivek Avasthi
Mr. Ramesh Dhar
Mr. Ravindra Mathur
Mr. G.N. Gauba
Mr. Vijay Mediratta
Mr. N Ramanathan
iii) Relatives of Key Management Personnel:
Mr. Laksh Vaaman Sehgal
Mrs. Renu Sehgal
Ms. Vidhi Sehgal
Mrs. Geeta Soni
Mrs. Neelu Mehra
Mrs. Sunita Gauba
Mr. P. Avasthi
Mrs. P. Avasthi
Mr. Harjit Singh
Ms. Upkar Gujral
Ms Subina Avasthi
92
d. Companies in which Key Managerial Personnel or their relatives have significant influence:
Motherson Air Travel Agencies Limited
Motherson Advanced Systems and Solutions Limited
Sumi Motherson Innovative Engineering Limited
MothersonSumi Infotech and Designs Limited
Motherson Techno Tools Limited
Motherson Sehgal Cables
Vaaman Auto Industries
Ganapati Auto Industries
Motherson Auto Private Limited
South City Motors Ltd.
A Basic Concepts Designs Pty Ltd.
A Basic Concepts Designs India Private Ltd.
Motherson Engineering Research and Integrated Technologies Limited
Motherson Triplex & Optic System Technologies Pvt. Ltd.
ASI Motherson Communication Solution Ltd.
SWS India Management Support & Services (P) Ltd.
Motherson Advance Polymers Ltd.
Moon Meadows Pvt. Ltd.
Sis Bro Creations Pvt. Ltd.
Radha Rani Motors Pvt Ltd.
Motherson Advanced Auto Solutions Pvt. Ltd.
Motherson Tool Engg. & Design Pvt. Ltd.
Motherson Auto Solutions Pvt. Ltd.
Motherson Automations Pvt. Ltd.
Motherson Advanced Auto Engg. Pvt. Ltd.
Motherson Consultancy Pvt. Ltd.
Samvardhana Motherson Finance Ltd.
ATAR Mauritius Pvt. Ltd.
e. Joint Venturers:
Sumitomo Wiring Systems Limited, Japan
Lisa Draexlmaier GmbH, Germany
Wilhelm Pudenz GmbH, Germany
Schefenacker International AG & Co.
Kyungshin Industrial Co., Korea
WOCO Franz Josef Wolf Holding GmbH
Hag Kunststofftechnik GmbH
II.
Details of transactions, in the ordinary course of business at commercial terms, and balances with related parties as
mentioned in 1 above:
(Rs. in thousands)
S.No. Particulars
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
*
**.
Sale of goods
Rendering of Services
Sale of Fixed assets
Purchase of Goods
Purchase of Fixed Assets
Purchase of Services
Reimbursement
Investments made during the year
Royalty
Proceeds from Joint Venturer as
capital / share premium in subsidiaries
Intercorporate deposits accepted during the year
Intercorporate deposits repaid during the year
Intercorporate Deposit placed during the year
Security Deposits Received
Security Deposits Given
Remuneration/Sitting Fees of directors
Loans & Advances placed with related party
Loans & Advances received from related party
Interest income
Interest expense
Dividend Paid
Dividend Received
Balances as at year end
Investments
Loans & Advances Payable
Loans Receivable
Guarantees Closing
Trade Payables
Trade Receivables
Minority Interest
Parties mentioned
in 11 (a) &
(e) above
Parties mentioned
in 11 I(b) & (d)
Parties mentioned
in 11 I(c)
above
Current
Year
Previous
Year
Current
Year
Previous
Year
Current
Year
Previous
Year
881,765
360
—
299,137
16,515
38,371
708
—
41,524
670,696
1,854
9,125
135,928
6,103
18,815
2,468
20,813
27,940
11,528
5,945
11
349,689
22,409
233,633
1,995
—
—
6,618
5,971
—
364,705
9,970
202,089
2,973
—
30
—
—
—
—
—
3,887*
—
—
—
—
—
—
—
—
6,339
—
—
—
52,290
2,818
18,365
7,000
—
—
—
—
—
3,193
2,178
41,459
7,200
—
—
5,360
—
—
—
—
73,075
—
1,783
1,646
29,363
—
—
17,500
39,550
27,050
2,743
8,066
—
—
—
213
221
48,450
—
—
267,500
225,000
—
—
2,696
—
—
—
—
2,229
33,124
—
—
—
—
—
542
—
15,397
—
—
—
—
9,761**
—
—
—
—
—
—
16,925
—
—
—
—
4,615
—
103,448
82,624
57,294
97,500
106,908
141,493
74,551
104,257
82,009
74,078
79,355
48,673
76,811
21,331
25,730
—
5,969
—
86,461
19,446
—
25,730
—
—
—
68,055
5,522
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Rent of Rs. 2,349 thousand paid to relatives, Mr. V.C Sehgal, Mr. Laksh Vaaman Sehgal, Mrs. Renu Sehgal, Ms. Vidhi Sehgal &
Mr. P. Avasthi.
Dividend of Rs. 9,761 thousand paid to relatives, Mr. Laksh Vaaman Sehgal, Mr. V.C. Sehgal, Mrs. Neelu Mehra, Mrs. Geeta Soni,
Mr./Mrs. Vidhi Sehgal, Mr. Pankaj Mital, Mr. Gujral, Mr. G.N.Gauba, Mr. Vivek Avasthi, Mrs. Renu Sehgal, Mrs. Padma Avasthi, Mrs. Subina Avasthi,
Mr. Upkar Gujral & Mr. Harjit Singh
93
12. SEGMENT INFORMATION
a)
Information about Primary Business Segments
(Rs. in thousands)
Automotive
Current
Year
Segment revenue
External
Inter segment
6,957
Total revenue
Results
Segment result
Interest expense (net of Interest income)
Other Unallocable (net of income)
Profit of Associates
Profit before taxation
Provision for taxation
Net profit after tax
- Concern share
- Minority —
94
Other Items
Segment Assets
Segment Liabilities
Capital Expenditure
Depreciation & Amortisation
Non-cash items other than depreciation
6,831,549
9,839
6,821,710
Previous
Year
Non Automotive
Current
Year
Unallocated
Previous Current
Year
Year
5,100,949 1,088,214
6,957
—
5,093,992 1,088,214
867,599
—
867,599
9,445
—
9,445
—
33,539
(6,492)
3,525
—
—
—
—
—
902,238
—
—
—
—
—
—
—
—
719,750
—
—
—
—
—
—
—
—
251,823
—
—
—
—
—
—
—
—
177,073
—
—
—
—
—
—
—
—
4,427,058
1,191,993
906,637
320,180
—
3,196,141
758,156
507,710
291,388
814
696,993
120,573
77,277
20,976
—
560,253
37,277
149,220 1,649,081
115,392
—
12,763
—
—
—
Previous
Year
Total
Current
Year
Previous
Year
9,195 7,929,208 5,977,743
—
9,839
9,195 7,919,369 5,970,786
— 1,154,061
44,790
33,539
(2,930)
(6,492)
2,540
3,525
— 1,130,539
— 272,245
— 858,294
— 839,972
— (18,322)
896,824
44,790
(2,930)
2,540
857,504
208,477
649,027
652,382
(3,355)
37,925 5,161,328 3,794,319
1,278,055 2,961,647 2,185,431
— 983,914 623,102
— 341,156 304,151
—
—
814
b) Information about Secondary Business Segments
(Rs. in thousands)
India
Revenue by geographical markets Current
Year
External
Total
Carrying amount of segment assets
Addition to fixed assets
5,679,519
5,679,519
3,947,383
828,894
Previous
Year
Outside India*
Current
Year
Unallocated
Previous Current
Year
Year
4,446,361 2,230,405 1,515,230
4,446,361 2,230,405 1,515,230
3,019,453 1,176,668
736,941
468,082 132,159
155,020
9,445
9,445
37,277
—
Previous
Year
Total
Current
Year
Previous
Year
9,195 7,919,369 5,970,786
9,195 7,919,369 5,970,786
37,925 5,161,328 3,794,319
— 983,914 623,102
* Includes Europe, Americas, Asia Pacific and Middle East
c) Composition of Business Segments
The Company is organised into two main business segments, namely:
Automotive
Non Automotive
d)
Wiring Harness, High Tension Cords, Wire, Plastic Components,
Rubber Components, Blade Fuse Link, Fuse Holder, Cockpit Assembly
Wiring Harness, Pen-Stamp Assembly, Plastic Components, Household Wires, Plates
Inter Segment Transfer Pricing
Inter Segment prices are normally negotiated amongst the segments with reference to the costs, market prices and
business risks, with an overall optimisation objective for the company.
13. Interest in Joint Ventures
The company’s interests, as a venture, in jointly controlled entities (including joint venture through a subsidiary) as at March 31, 2005
are: Name of the Company
Country of
Incorporation
% Voting power
held As at
March 31, 2005
India
India
49%
50%
UAE
33.33%
Schefenacker Motherson limited
Kyungshin Industrial Motherson Limited
WOCO Motherson Limited (FZC) (through MSSL
Mauritius Holdings Limited)
% Voting power
held As at
March 31, 2004
49%
50%
33.33%
The following amount represents the Groups share of the assets and liabilities and revenue and expenses of the joint venture and are
included in the consolidated balance sheet and consolidated profit & loss account:
(Rs. in thousands)
Particulars
2005
2004
Assets
Fixed Assets
Capital Work in Progress
Inventory
Cash & Bank
Debtors
Loans & Advances
Miscellaneous Expenditure
156,412
4,736
105,759
37,482
113,643
58,228
8
83,755
16,450
85,448
13,784
87,123
16,016
16
Liabilities
Secured Loans
Unsecured Loans
Current Liabilities & Provisions
Deferred Tax (Net)
72,429
6,000
214,096
838
43,179
986
138,771
1,463
78,957
14,245
946,483
9,916
851,867
104,532
20,102
84,430
705,334
6,144
653,313
58,165
10,996
47,169
Reserves & Surplus
Revenues
Sales
Other Income
Expenditure
Profit before Tax
Provision for Tax
Profit after Tax
14. The Company has acquired 26% of equity and preference share capital of Draexlmaier & Motherson Electrical Systems India Ltd
(DMSIL) from Lisa Draexlmaier GmbH, Germany. Pursuant to this acquisition DMSIL has become 100% subsidiary of the company.
Further Board of Directors in their meeting held on May 27, 2005 has approved the amalgamation of Draexlmaier & Motherson
Electrical Systems India Limited with the company w.e.f. 1st April 2005 subject to necessary approvals.
15. The company is in the process of completing the required transfer pricing study. The impact if any, which may arise consequent to the
study, has not been considered in these accounts and would be accounted on completion of the said study.
16. The corresponding figures of previous year have been regrouped, rearranged wherever necessary.
for and on behalf of the Board
V.C. SEHGAL
Chairman
.
Place : Noida
Date : May 27, 2005
A. YAMAUCHI
Whole time Director
G.N. GAUBA
Co. Secretary & V.P. Finance
PANKAJ MITAL
Chief Operating Officer
95
MSSL GmbH
DIRECTORS’ REPORT
Your Directors have pleasure in presenting First Report together with the audited accounts of the Company for the
period ended on March 31, 2005.
The Company was incorporated on 28th January, 2005 as a wholly owned subsidiary of MSSL Mideast (FZE), which is
incorporated as a Free Zone Establishment (FZE) with limited liability in Sharjah, UAE. MSSL Mideast (FZE) is 100%
subsidiary of Motherson Sumi Systems Limited (“the Ultimate Holding Company”), which is incorporated in India.
The main object of your company is maintenance and management (including acquisition and transfer) of ownership
property, specifically of companies which develop, produce and sell rubber, synthetic, plastic and metal products, as well
as trade with such products, machines, tools and other accessories.
The Board of Directors place on record the support extended by shareholders, associates, bankers and various government
and regulatory authorities.
For and on behalf of the Board
for MSSL GmbH
Place: Frankfurt
Date: 21st May, 2005
Jen Cordes
General Manager
99
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDER OF MSSL GmbH
We have audited the accompanying balance sheet of MSSL GmbH (“the company”) as at 31 March 2005 and the related
statements of income and cash flows for the period 28 January 2005 to 31 March 2005. These financial statements are
the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management as well
as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the company as at
31 March 2005 and the results of its operations and its cash flows for the period 28 January 2005 to 31 March 2005 in
accordance with International Financial Reporting Standards.
Place: New Delhi
Date: 21 May, 2005
Lovelock & Lewes
Chartered Accountants
BALANCE SHEET AS AT 31st MARCH, 2005
As At
March 31, 2005
Schedule
Notes
2005
Euros
2005
Rs in thousands
2
3
381
249,153
22
14,122
249,534
14,144
250,000
(3,516)
14,170
(199)
246,484
13,971
3,050
173
3,050
173
249,534
14,144
Assets
Current assets
Other receivables and prepayments
Cash and cash equivalents
Total assets
Equity and Liabilities
Capital and reserves
Share capital
Retained earnings
Current liabilities
Trade and other payables
100
Total equity and liabilities
4
5
These financial statements were approved on May 21, 2005 and were signed by:
for and on behalf of MSSL GmbH
Jens Cordes
General Manager
STATEMENT OF INCOME FOR THE PERIOD 28 JANUARY 2005 TO 31 MARCH 2005
Notes
For the period
January 2005 to
31 March 2005
Euros
For the period
January 2005 to
31 March 2005
Rs in thousands
401
401
23
23
3,917
(3,516)
222
199
Interest income
Expenses
General and administration
Profit/(Loss)
6
Statement of changes in equity for the period 28 January 2005 to 31 March 2005
Notes
Share
Capital
Euros
Retained
Earnings
Euros
—
—
—
—
250,000
(3,516)
246,484
13,971
250,000
(3,516)
246,484
13,971
14,170
(199)
13,971
At 1 April 2004
Adjustment for the year
4
At 31 March 2005
Rs in thousands
Total
Total
Euros Rs. in thousands
Statement of cash flows for the period 28 January 2005 31 March 2005
Notes
Operating activities
Loss for the period 28 January 2005
to 31 March 2005
For the period 28
January 2005 to
31 March, 2005
Euros
For the period 28
January 2005 to
31 March, 2005
Rs. in thousands
(3,516)
(199)
Changes in working capital:
Trade and other payables
5
3,050
173
Other receivables and prepayments
Net cash (used in)/provided by operating activities
2
(381)
(847)
(22)
(48)
4
250,000
14,170
Net cash (used in) / provided by financing Activities
250,000
14,170
Net (decrease)/increase in cash and cash equivalents
249,153
14,122
—
—
249,153
14,122
Financing activities
Proceeds from issuance of share capital
Cash and cash equivalents, beginning of the year
Cash and cash equivalents, end of the year
3
101
ACCOUNTING POLICIES
The significant accounting policies adopted by the company in the preparation of these financial statements are as follows:
Basis of preparation
The financial statements have been prepared in accordance with and comply with International Financial Reporting Standards,
including International Accounting Standards (“IAS”) and the interpretations issued by the International Accounting Standards
Board. The financial statements have been prepared under the historical cost convention.
The financial statements are presented in Euros as this is the functional currency for its transactions as the Company is
incorporated in Germany
Receivables
Receivables are carried at original cost less provision, if any, made for impairment of these receivables. A provision for impairment
of receivables is established when there is an objective evidence that the Company will not be able to collect all amounts due
according to the original terms of receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits and current accounts with banks.
Trade and Other Payables
102
Trade and other payables have been reported in the amount of the anticipated use by the Company.
Other Income
Interest income is recognised on an accrual basis unless collectibility is in doubt.
Notes to the financial statements for the period 28 January 2005 to 31 March 2005
1. Incorporation and activities
MSSL GmbH (“the Company”) is a wholly owned subsidiary of MSSL Mideast (FZE), which is incorporated as a Free Zone
Establishment (FZE) with limited liability in Sharjah, UAE. MSSL Mideast (FZE) is 100% subsidiary of Motherson Sumi Systems
Limited (“the Ultimate Holding Company”), which is incorporated in India.
MSSL GmbH was incorporated on January 28, 2005 in Germany as Limited Liability Company, with its registered office at
District Court, Frankfurt am Main, under registration number HRB 74553. The purpose of the company is the maintenance
and management (including acquisition and transfer) of ownership property, specifically of companies which develop, produce
and sell rubber, synthetic, plastic and metal products and other products of an equivalent or similar nature, as well as machines,
tools and other accessories for the manufacture of such products, as well as trade with such products, machines, tools and
other accessories and perform a holding function and provide consulting and other similar services for such companies. The
company can participate in, take-over, represent and set up branch offices of equivalent or similar companies. The Company
is also entitled to transact all deals appropriate for directly or indirectly serving its purpose.
2. Other receivables and prepayments
As at
31st March 2005
Euros
As at
31st March 2005
Rs in thousands
Prepayments
Corporation tax and solidarity supplement
Input tax deductible in following year
VAT for current business year
127
138
116
7
8
7
Total
381
22
100
6
9,053
240,000
513
13,603
249,153
14,122
3. Cash and Cash equivalent
Cash on hand
Cash at Bank
- in Current account
- in Deposit account
Total
At 31 March 2005, the current and deposit account were placed with a branch of an international bank. The deposits with
bank carry an interest rate of 1.30% per annum.
Notes to the financial statements for the period 28 January 2005 to 31 March 2005 (continued)
4. Share capital
Share capital comprises of 1 share of Euros 250,000.
5. Trade and other payables
Trade payables
Other payables and accruals
Total
As at
31st March 2005
Euros
As at
31st March 2005
Rs in thousands
1,000
2,050
57
116
3,050
173
For the period 28
January 2005 to
31 March 2005
Euros
For the period 28
January 2005 to
31 March 2005
Rs in thousands
3,917
222
3,917
222
6. General and administration expenses
Legal and Professional
Total
103
7. Fair value
The fair value of the company’s financial assets and liabilities at 31 March 2005 approximated their net book amounts as
reflected in these financial statements.
8. Comparatives
This being first year of Company’s incorporation, hence no comparative figures are available.
Note : Indian Rupee equivalent of figures have been arrived at by applying the year end interbank exchange rate Euro 1 = Rs 56.68 and do not form part of
the reports of MSSL GmbH as made out in accordance with the laws of the country of incorporation.
104
ELECTRONIC CLEARING SERVICES (ECS) MANDATE FORMAT
MCS Limited
Sri Venketash Bhavan
W – 40, Okhla Industrial Area, Phase - II
New Delhi – 110 020
UNIT : MOTHERSON SUMI SYSTEMS LIMITED
REF :
PAYMENT OF DIVIDEND
I wish to participate in the Electronic Clearing Service (ECS)
I do not wish to participate in the ECS. However, kindly print the bank particulars given below on the dividend warrant
being issued to me.
(Tick in the box provided above to indicate your option)
Name of the Shareholder
:
_________________________________
Folio No.
:
_________________________________
Address
:
_________________________________
_________________________________
Particulars of Bank
a)
Name of the Bank
:
__________________________________
b) Branch Address
:
__________________________________
c)
:
9 digit Code Number
of the Bank & Branch
as appearing on the
MICR cheque issued
by the Bank
d) Account Type
(Please Tick)
:
e) Ledger Folio No.
(if any) of your Bank
Account
:
f)
:
Savings
Account No.
Current
Cash
Credit
_________________________________
_________________________________
I hereby declare that the particulars given above are correct and complete. I undertake to inform any subsequent changes
in the above particulars before the relevant closure date(s). If the payment is delayed or not effected at all for any
reason(s) beyond the control of the Company, I would not hold the Company responsible.
Date:
________________________
Signature of the Shareholder
Notes :
1) Please ensure that the details submitted by you are correct as any error therein could result in the dividend amount
being credited to a wrong account.
2) The nine digit code number of your bank and branch is mentioned on the MICR band next to the cheque number.
Proxy.p65
105
7/26/2005, 2:31 AM
NOMINATION FORM
[To be filled in by individual(s)]
To,
From
Motherson Sumi Systems Limited
C/o MCS Limited,
Sri Venakatesh Bhawan,
W – 40, Okhla Industrial Area,
Phase – II,
New Delhi – 110 020.
Name of shareholder and address
_________________________________
_________________________________
Folio No
_________________________________
No. of Shares _________________________________
I/We am/are holder(s) of shares of the Company as mentioned above. I/We nominate the following person in whom all
rights of transfer and/or amount payable in respect of Equity Shares shall vest in the event of my/our death.
Nominee’s Name
Age
To be furnished in case the nominee is a minor
Date of Birth
Guardian’s Names & Address*
Occupation of
1
Service
2
Business
3
Student
Nominee Tick ()
5
Professional
6
Farmer
7
Others
4
Household
Nominee’s Address
Pin Code
Telephone No.
FAX No.
Email Address
STD Code
Specimen Signature
of Nominee/
Guardian*
*To be filled in case nominee is a minor
Kindly take the aforesaid details on record
Thanking you,
Yours faithfully
Name and address of equity shareholder
{as appearing on the Certificate(s)}
Date . . . . . . . . . . . .
Signature (as per specimen
with Company)
Sole/1st holder (address)
2nd holder
3rd holder
4th holder
Witnesses (two)
Name and Address
Signature & Date
1.
2.
Proxy.p65
107
7/26/2005, 2:31 AM
INSTRUCTIONS:
1.
Please read the instructions given below very carefully and follow the same to the letter. If the form is not filled as
per instructions, the same will be rejected.
2.
Individuals can make the nomination only. This facility is not available to non individuals including society, trust, body
corporate, partnership firm, Karta of Hindu Undivided Family and holders of power of attorney. If the shares are
held jointly all joint holders must sign (as per the specimen registered with the Company) the nomination form.
3.
A holder of Shares can nominate a minor and in that event the holder should give the name and address of the
Guardian.
4.
The nominee cannot be a trust, society, body corporate, partnership firm, Karta of Hindu Undivided Family, or a
power of attorney holder. A non–resident Indian can be a nominee on re–patriable basis.
5.
Transfer of Shares in favour of a nominee shall be a valid discharge by the Company against the legal heir(s).
6.
Only one person can be nominated for a given folio.
7.
Details of all holders in a folio need to be filled in; else the request will be rejected.
8.
The nomination will be registered only when it is complete in all respects including the signature of (a) all registered
holders (as per specimen lodged with the Company) and (b) the nominee.
9.
This nomination will stand rescinded whenever the Shares in the given folio are entirely transferred or dematerialised.
10.
Upon receipt of a duly executed nomination form, the Registrar and Transfer Agent of the Company will register
the form and allot a registration number. The registration number and folio no. should be quoted by the nominee in
all future correspondence.
11.
The nomination can be varied or cancelled by executing fresh nomination form.
12.
The Company will not entertain any claim other than that of a registered nominee, unless so directed by any
competent court.
13.
The intimation regarding nomination / nomination form should be filed in duplicate with the Registrar and Transfer
Agents of the Company who will return one copy thereof to the Shareholders.
14.
For shares held in dematerialised mode nomination is required to be filed with the Depository Participant in their
prescribed form.
FOR OFFICE USE ONLY
Nomination Registration Number
Date of Registration
Checked by (Name and Signature)
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7/26/2005, 2:31 AM